Substantive progress made on growth strategies in the third quarter of
2013:

Developing our Asian opportunity to the fullest - Double digit growth in wealth sales1 over the third quarter of 2012; maintained leading position in net cash
flows in the Mandatory Provident Fund in Hong Kong. While insurance
sales were below the same quarter last year, we have seen good momentum
building in both Hong Kong and Japan in September and expect this to
carry forward to the fourth quarter2.

Growing our wealth and asset management businesses in Asia, Canada, and
the U.S. - Strong net wealth flows contributed to the 20th consecutive quarter of record funds under management1; institutional advisory assets under management increased 30 per cent
over the same quarter last year.

Continuing to build our balanced Canadian franchise - Mutual fund assets under management increased 29 per cent over the same
quarter in the prior year, double the industry growth rate3; double digit growth in our group pension business; strong new loan
volume growth at Manulife Bank; first company in Canada to be licensed
to administer the new federal Pooled Registered Pension Plans (PRPP);
launched RetirementPlus, an innovative new segregated fund product; and
expanded our travel insurance business through a transaction with RBC
Insurance.

Continuing to grow higher ROE, lower risk U.S. businesses - Robust mutual fund sales were nearly double the third quarter of
2012; solid insurance sales with improved new business mix; and
rebranded mutual fund business to John Hancock Investments and
broker-dealer network to Signator Investors. Sales in the U.S. 401(k)
business declined as a result of lower plan turnover and competitive
pressures but we received additional commitments on the new mid-market
401(k) platform.

Highlights for the quarter ended September 30, 2013:

Reported net income attributed to shareholders of $1,034 million.

Generated core earnings1 of $704 million, up $95 million from 2Q13.

Achieved strong wealth sales of $11.3 billion, up 34 per cent4 from 3Q12.

Reported a four per cent increase in insurance sales over 3Q12.

Generated strong investment-related experience of $543 million.

Increased MLI's MCCSR ratio by seven points over 2Q13 to 229 per cent.

Generated new business embedded value1 of $278 million, up 56 per cent from 3Q12.

Reported net income attributed to shareholders in accordance with U.S.
GAAP1 of $148 million.

_______________

1

This is a non-GAAP measure. See "Performance and Non-GAAP Measures"
below.

2

See "Caution regarding forward-looking statements" below.

3

Based on publicly available information from Investor Economics and the
Investment Funds Institute of Canada (IFIC).

4

Growth (declines) in sales, premiums and deposits and funds under
management are stated on a constant currency basis, a non-GAAP
measure. See "Performance and Non-GAAP Measures" below.

TORONTO, Nov. 7, 2013 /PRNewswire/ - Manulife Financial Corporation ("MFC")
announced today net income attributed to shareholders of $1,034 million
for the third quarter ended September 30, 2013. This compares with a
net loss of $211 million in the third quarter of 2012. Fully diluted
earnings per common share ("EPS") were $0.54 and return on common
shareholders' equity ("ROE") was 16.8 per cent for the third quarter of
2013.

In the third quarter of 2013, MFC generated core earnings of $704
million compared with $570 million in the third quarter of 2012. Fully
diluted core earnings per common share ("Core EPS")5 were $0.36 and core return on common shareholders' equity ("Core ROE")5 was 11.3 per cent.

Donald Guloien, President and Chief Executive Officer said, "We are very
pleased to see our strategy unfolding into strong operating results,
and are making real tangible progress against our longer-term
objectives6. As we predicted last quarter, a number of items with unusual timing
reversed themselves this quarter, contributing to the increase in net
income. Investment performance also made a very significant
contribution. Our core earnings give an indication of the underlying
earnings capacity of the business going forward."

Mr. Guloien added, "Insurance sales increased modestly, but most
importantly, were accompanied by much higher margins; wealth sales were
extremely positive across the board. The overall plan is unfolding
extremely well."

Steve Roder, Chief Financial Officer said, "We continue to make steady
progress on growing our core earnings, and we reported net income of $1
billion despite incurring a net charge of $252 million as a result of
the annual review of our actuarial methods and assumptions."

Mr. Roder continued, "Our capital ratio was further strengthened by
seven points in the third quarter to 229 per cent."

_______________
5 This is a non-GAAP measure. See "Performance and Non-GAAP Measures"
below.
6 See Caution regarding forward-looking statements below.

Highlights for the quarter ended September 30, 2013:

Reported net income attributed to shareholders of $1,034 million compared to a loss of $211 million in the third quarter of 2012.

Earnings benefitted by $543 million from the favourable impact that the
current period's investment activity had on the measurement of our
policy liabilities and investment income as well as market-related
factors of $94 million.

Partially offsetting these favourable impacts was a charge of $252
million related to the annual review of actuarial methods and
assumptions. In the third quarter of 2012, we reported a charge of $1.0
billion related to the corresponding annual review.

This quarter, we saw a reversal of the second quarter charges related to
(1) the short term increase in our Government of Canada bond holding,
as we redeployed these into higher yielding assets and (2) the impact
of interest rates on the bond and balanced funds in variable annuity
products, as we updated our bond parameters to reflect higher
prevailing rates as part of the third quarter actuarial review.

Net income attributed to shareholders for the nine months ended
September 30, 2013 was $1,833 million as compared to $733 million for
the first nine months of 2012.

Generated core earnings of $704 million, an increase of $95 million from the second quarter of 2013 and an increase of $134 million from a
year earlier.

The $95 million increase over the prior quarter reflects more favourable
policyholder experience, a $40 million release of tax provisions from
closing prior years' tax filings in Canada, and lower net hedging
costs, partially offset by lower investment income in the surplus
segment.

The $134 million increase over the prior year reflects improved new
business margins on our insurance businesses, higher fee income as a
result of the growth of our wealth management businesses, improved
policyholder claims experience, higher release of tax provisions from
the closure of prior years' tax filings and lower hedging costs.

Core earnings for the nine months ended September 30, 2013 were $1,932
million as compared to $1,695 million for the first nine months of
2012.

Achieved strong wealth sales of $11.3 billion, up 34 per cent from a year earlier. Asia wealth sales increased by 21 per cent with strong double digit
growth across most territories. In Canada, strong growth in mutual
fund deposits and bank lending volumes contributed to a 32 per cent
growth in wealth sales. U.S. Division's wealth sales rose 37 per cent
as mutual fund sales nearly doubled but were partially offset by a 43
per cent decline in Retirement Plan Services sales driven in part by
lower plan turnover in the market.

Reported a four per cent increase in insurance sales compared to a year ago. Insurance sales in Asia declined four per cent
as the increase in sales in Hong Kong and Other Asia7 were more than offset by lower corporate product sales in Japan. In
Canada, although Individual Insurance annualized premium sales were
eight per cent lower than the prior year, sales in Group Benefits drove
an increase of 27 per cent in total insurance sales compared with third
quarter 2012. In the U.S., insurance sales were in line with the prior
year and reflected a more favourable product mix.

Generated strong investment-related experience of $543 million, $52 million of which was included in core earnings. The experience included $284 million primarily attributable to
favourable returns from our timber, agriculture and private equity
assets; gains from the redeployment of government securities into
higher yielding assets; and continued excellent credit experience. In
addition, we reported net gains of $259 million related to planned
asset allocation activities that enhanced surplus liquidity and
resulted in better asset-liability matching in the respective liability
segments.

Ended the quarter with the Minimum Continuing Capital and Surplus
Requirements ("MCCSR") ratio for The Manufacturers Life Insurance
Company ("MLI") of 229 per cent, up seven points from June 30, 2013. This seven point increase was
driven in part by lower required capital on segregated funds, as a
result of both higher equity markets and changes to the assumptions
used in the required capital calculation consistent with the third
quarter changes in actuarial assumptions. Third quarter earnings also
contributed to the increase.

Generated new business embedded value ("NBEV") of $278 million, up 56 per cent from a year ago. The increase in NBEV reflects
favourable product re-pricing and changes to new business mix in our
insurance businesses, higher volumes in our wealth management
businesses and improved expenses.

This was largely driven by unfavourable changes to lapse and
policyholder behavior assumptions, partly offset by the benefit from
the annual update to the parameters used in the stochastic valuation of
our segregated fund businesses and other annual updates.

In the fourth quarter, we will be completing our review of our modeling
of future tax cash flows for our U.S. Variable Annuity business and we
expect that this could result in a charge to earnings. The amount is
dependent upon the potential implementation of changes to the
investment objectives of separate accounts that support our Variable
Annuity products, which require policyholder approval. Separately, as
previously announced, we expect the sale of our Taiwan insurance
business to close in the fourth quarter or early 2014, subject to
regulatory approvals. We expect the net impact of all these items, if
completed, would be neutral to positive8.

Reported $148 million net income attributed to shareholders in
accordance with U.S. GAAP inclusive of $498 million of losses related to our variable annuity business and macro hedges.

_______________

7

Other Asia excludes Japan, Hong Kong and Indonesia.

8

See "Caution regarding forward-looking statements" below.

Financial Highlights

Quarterly Results

YTD Results

C$ millions, unless otherwise stated,
unaudited

3Q 2013

2Q 2013

(restated)(1)
3Q 2012

Sept 2013

(restated)(1)
Sept 2012

Net income (loss) attributed to shareholders

$

1,034

$

259

$

(211)

$

1,833

$

733

Preferred share dividends

(33)

(32)

(31)

(97)

(83)

Common shareholders' net income (loss)

$

1,001

$

227

$

(242)

$

1,736

$

650

Reconciliation of core earnings to net income (loss) attributed to
shareholders:

Core earnings(2)

$

704

$

609

$

570

$

1,932

$

1,695

Investment-related experience in excess of amounts included in
core earnings

491

(97)

365

491

628

Core earnings plus investment-related experience in excess
of amounts included in core earnings

$

1,195

$

512

$

935

$

2,423

$

2,323

Other items to reconcile core earnings to net income attributed to
shareholders:

The 2012 results were restated to reflect the retrospective application
of new IFRS accounting standards effective January 1, 2013. For a
detailed description of the change see our first quarter 2013 report to
shareholders.

(2)

This item is a non-GAAP measure. See "Performance and Non-GAAP Measures"
below.

(3)

For a more detailed description see Section B1 below.

SALES AND BUSINESS GROWTH

Asia Division

Robert Cook, Senior Executive Vice President and General Manager, Asia
Division, stated, "Our insurance sales were disappointing in the third
quarter of 2013, flat compared to the prior quarter and down four per
cent year-over-year, largely due to lower corporate product sales in
Japan. However, we did see good momentum building in both Hong Kong and
Japan in September, and we expect this to carry forward to the fourth
quarter9. Our third quarter wealth sales increased by 21 per cent over the third
quarter of 2012, and were down as expected from our sales in the second
quarter of 2013 as we had fewer fund launches during the third quarter.
We remain confident in the long-term trends of our wealth strategy."

Asia Division third quarter 2013 insurance sales of US$251 million were
four per cent lower than the same quarter of 2012 primarily due to
lower corporate product sales in Japan following pricing actions in the
fourth quarter of 2012. All insurance sales growth percentages quoted
below are based on third quarter 2013 versus third quarter 2012, unless
stated otherwise.

Japan insurance sales of US$95 million decreased by 20 per cent primarily due
to the pricing actions discussed above, partly offset by contributions
from new product launches.

Hong Kong insurance sales of US$59 million were up seven per cent driven by
growth in our agency force and higher par and critical illness product
sales.

Indonesia insurance sales of US$27 million were consistent with last year as the
44 per cent growth in Bank Danamon sales was offset by lower sales from
other bank partners.

Asia Other insurance sales (Asia excluding Japan, Hong Kong and Indonesia) of
US$70 million increased 13 per cent driven by strong universal life
product sales in Singapore and higher agency sales in Vietnam.

Third quarter 2013 wealth sales of US$1.3 billion were 21 per cent
higher than the third quarter of 2012. Sales growth percentages quoted
below are based on third quarter 2013 versus third quarter 2012, unless
stated otherwise.

Japan wealth sales were US$226 million, an increase of 60 per cent, driven by
higher sales of the Strategic Income Fund, launched in the fourth
quarter of 2012.

Hong Kong wealth sales of US$243 million, an increase of 46 per cent, continued
to benefit from higher Pension sales following the launch of the
Mandatory Provident Fund's new Employee Choice Arrangement late last
year.

Indonesia wealth sales of US$137 million decreased by 12 per cent due to lower
single premium unit-linked product sales from the bank channel, partly
offset by higher pension sales.

Asia Other wealth sales of US$659 million were up 14 per cent driven by higher
mutual fund sales in Taiwan and the continued success of single premium
unit-linked product sales in the Philippines, partly offset by lower
mutual fund sales in China. Record sales in Malaysia, boosted by the
launch of a new bond fund and a new single premium unit-linked product
through our expanded bank distribution, also contributed.

Asia Division continues to execute on our longer-term growth strategy by
expanding agency and bank channel distribution capacity. Contracted
agents stood at approximately 54,600 as at September 30, 2013, a six
per cent increase from September 30, 2012, with double digit growth in
Indonesia and Vietnam. Bank channel sales, expressed as total
annualized insurance and wealth premium equivalent ("APE") basis sales10, decreased by 11 per cent primarily due to lower term and whole life
product sales in Japan following pricing actions last year.

_______________

9

See "Caution regarding forward-looking statements" below.

10

This is a non-GAAP measure. See "Performance and Non-GAAP Measures"
below.

Canadian Division
Marianne Harrison, Senior Executive Vice President and General Manager,
Canadian Division reported, "We made progress across all our diverse
business lines in the third quarter. We have strong momentum in both
Manulife Mutual Funds and Group Retirement Solutions. Our market
leadership continued and we were the first company in Canada licensed
by the Office of the Superintendent of Financial Institutions to
administer the new federal Pooled Registered Pension Plans which are
expected to be available for sale in certain provinces in 2014. We
launched our innovative RetirementPlus, the next step in the evolution
of our segregated fund product portfolio. Manulife Bank reported
growth in new loan production and Group Benefits continued to produce
strong results with solid sales growth in key markets. Individual
Insurance sales continued to reflect the impact of deliberate product
re-positioning. We also expanded our travel insurance business through
a transaction with RBC Insurance Company of Canada."

Individual wealth management sales of $2.8 billion for the third quarter of 2013 increased 33 per cent
compared with the third quarter of 2012, driven by continued strong
momentum in mutual funds and higher new loan volumes in Manulife Bank.

Manulife Mutual Funds gross deposits of $1.5 billion in the third quarter were more than 70
per cent higher than in the third quarter of 2012. We continue to
leverage our global asset management expertise, driving strong fund
performance across a diverse global platform. At September 30, 2013,
Manulife Mutual Funds offered 19 Four- or Five- Star Morningstar11 rated mutual funds. Record year-to-date net sales, in combination with favourable market performance, drove assets under
management to a record $25.3 billion, up 29 per cent from September 30,
2012, double the industry growth rate12.

Manulife Bank's net lending assets were a record $18.5 billion, an increase of nine per
cent from the third quarter of 2012, which outpaced industry growth13 and reflects good retention and strong new lending volumes. Third
quarter new loan production of $1.3 billion increased 14 per cent from
the third quarter of 2012.

Variable annuity sales were $313 million, 32 per cent lower than the third quarter of
2012, reflecting the evolution of our product strategy. During the
quarter, we launched Manulife RetirementPlus, an innovative, flexible
retirement savings and income solution which customers can personalize
to meet their retirement needs. Fixed product sales were $108 million in the third quarter, up significantly from
third quarter 2012, reflecting more competitive rate positioning.

Individual Insurance third quarter 2013 annualized premium sales were $61 million or eight per cent lower
than the same period in 2012 as we continue to focus on products with
more favourable risk profiles. Third quarter single premium sales of
$90 million were 11 per cent higher than third quarter 2012 sales
driven by growth in travel insurance.

In our Group businesses, Group Benefits sales were $116 million for the third quarter of 2013, an increase of 63
per cent compared with the third quarter of 2012 and Group Retirement Solutions sales of $273 million were 23 per cent higher than the same period last
year. According to the most recently published industry information,
Group Benefits continued to lead the industry in sales in the second quarter of 201314.

_______________

11

For each fund with at least a 3-year history, Morningstar calculates a
Morningstar Rating based on a Morningstar Risk-Adjusted Return that
accounts for variation in a fund's monthly performance (including
effects of sales charges, loads and redemption fees), placing more
emphasis on downward variations and rewarding consistent performance.
The top 10% of funds in each category, the next 22.5%, 35%, 22.5% and
bottom 10% receive 5, 4, 3, 2 or 1 star, respectively. The Overall
Morningstar Rating for a fund is derived from a weighted average of the
performance associated with its 3-, 5- and 10 year (if applicable)
Morningstar Rating metrics. Past performance is no guarantee of future
results. The overall rating includes the effects of sales charges,
loads and redemption fees, while the load-waived does not. Load-waived
rating for Class A shares should only be considered by investors who
are not subject to a front-end sales charge.

12

Based on publicly available information from Investor Economics and the
Investment Funds Institute of Canada (IFIC).

13

As per McVay and Associates, The Personal Banking Product Market Share,
August 2013

14

Based on quarterly LIMRA industry sales reports as at June 30, 2013.

U.S. Division
Craig Bromley, Senior Executive Vice President and General Manager, U.S.
Division stated, "The U.S. Division reported another strong quarter of
operating results and we are executing well in all of our businesses.
Robust sales in John Hancock Investments contributed to record funds
under management in the Wealth Management businesses. On the insurance
front, we continued to record strong sales in our repriced, lower risk
insurance products. We also increased the number of Signator agents,
expanded our expertise in wealth management products, and strengthened
our geographic presence in the western and northern parts of the United
States through the acquisition of Symetra Investment Services in
October."

Wealth Management third quarter 2013 sales were US$6.7 billion, an
increase of 37 per cent compared with the same quarter of the prior
year.

John Hancock Investments ("JH Investments") third quarter 2013 sales of US$5.8 billion increased
87 per cent compared with our third quarter 2012 results, and included
increases across all distribution channels. Sales were driven by a
strong product lineup which leverages our manager-of-managers
investment model, strong distribution partnerships, improved
productivity of the sales force, and a shift in investor money back to
equity funds. At September 30, 2013, JH Investments offered 26 Four- or
Five-Star Morningstar rated equity and fixed income mutual funds. JH
Investments redemption rates remained below the industry average,
contributing to its eighth consecutive quarter of positive net sales15. These sales and retention results propelled funds under management as
at September 30, 2013 to a record high of US$56 billion, a 38 per cent
increase from September 30, 2012.

John Hancock Retirement Plan Services third quarter sales were US$870 million, a decrease of 43 per cent
compared with third quarter 2012 results, driven in part by lower plan
turnover in the market. Funds under management grew to a record US$79
billion as at September 30, 2013, a 12 per cent increase from September
30, 2012. Our recently launched "Enterprise" product (a mutual fund
offering geared toward the mid-market) continues to gain traction.
Enterprise sales commitments now total approximately US$100 million.

The John Hancock Lifestyle and Target Date funds had assets under management of US$86.7 billion as at September 30, 2013,
an eight per cent increase over September 30, 2012, and we were the
fourth largest manager of assets in the U.S. for Lifestyle and Target
Date funds offered through retail mutual funds and variable insurance
products as of September 30, 201316. In the third quarter of 2013, new deposits included US$484 million of
JH Investments sales and US$2.0 billion of deposits from our 401(k)
products.

Overall U.S. Insurance sales of US$154 million for the third quarter of
2013 were in line with the same period in the prior year but continued
to include a higher proportion of sales from products with higher
margins and more favourable risk profiles.

John Hancock Life ("JH Life") sales of US$139 million were relatively flat compared with the third
quarter of 2012. The business generated strong sales of the Protection
universal life ("UL") and Indexed UL products, driven by growing market
acceptance of these products as alternatives to No-Lapse Guarantee.
This offset lower sales compared to the prior year of Corporate Owned
Life Insurance which can vary significantly by quarter. JH Life also
launched a new Survivorship Indexed Universal Life product in the third
quarter, which complements its single life offering, Protection Indexed
Universal Life, by offering survivorship protection.

John Hancock Long-Term Care sales of US$15 million in the third quarter of 2013 grew 15 per cent
compared with the same period in 2012, as a key competitor pulled back
in the market.

Investment Division
Warren Thomson, Senior Executive Vice President and Chief Investment
Officer, said, "General Fund investment results were very strong in the
third quarter 2013. We were pleased with the favourable returns from
our timber, agricultural and private equity investments, part of our
alternative long-duration asset portfolio where we have significant
investment management expertise and a history of strong performance.
Our credit experience continues to outperform, with Q3 marking the
tenth quarter out of the last twelve quarters where we met or exceeded
our pricing assumptions. This quarter, we also reported reinvestment
gains from the redeployment of government securities into higher
yielding assets and the completion of planned asset allocation
activities that enhanced surplus liquidity and resulted in better
asset-liability matching in the respective liability segments."

Mr. Thomson continued, "Strong, long-term investment performance
continues to be a differentiator for Manulife Asset Management; we
reported strong results, with all asset classes outperforming
quarterly, and on a 1, 3, and 5-year basis."

Assets managed by Manulife Asset Management ("MAM") were $265 billion as
at September 30, 2013, an increase of $3 billion from June 30, 2013. At
September 30, 2013, MAM had a total of 60 Four-and Five-Star
Morningstar rated funds, in line with June 30, 2013.

AWARDS & RECOGNITION

In Hong Kong, in the Reader's Digest Trusted Brand Awards, Manulife won Gold in the
insurance company category for the 10th consecutive year as well as winning Gold in the provident fund category
for the second year in a row.

In Hong Kong, Manulife won top spot in the insurance category in the Yahoo! Emotive
Brand Awards for the 10th consecutive year.

In Canada, Manulife was named to the 2013/2014 Dow Jones Sustainability North
American Index, recognizing our commitment to ethical business
practices and good governance, growing our business sustainably, and
contributing positively to the communities where we live and work.

In the U.S., John Hancock Retirement Plan Services was ranked first in five
categories, according to Plan Advisor magazine's annual survey, including best overall service, micro plans,
among other categories.

Notes:

Manulife Financial Corporation will host a Third Quarter Earnings
Results Conference Call at 2:00 p.m. ET on November 7, 2013. For local
and international locations, please call 416-340-8018 and toll free in
North America please call 1-866-225-0198. Please call in ten minutes
before the call starts. You will be required to provide your name and
organization to the operator. A replay of this call will be available
by 6:00 p.m. ET on November 7, 2013 through November 21, 2013 by
calling 905-694-9451 or 1-800-408-3053 (passcode: 6718073).

The conference call will also be webcast through Manulife Financial's
website at 2:00 p.m. ET on November 7, 2013. You may access the webcast
at: www.manulife.com/quarterlyreports. An archived version of the webcast will be available at 4:30 p.m. ET on
the website at the same URL as above.

The Third Quarter 2013 Statistical Information Package is also available
on the Manulife Financial website at: www.manulife.com/quarterlyreports. The document may be downloaded before the webcast begins.

MANAGEMENT'S DISCUSSION AND ANALYSIS
This Management's Discussion and Analysis ("MD&A") is current as of
November 7, 2013, unless otherwise noted. This MD&A should be read in
conjunction with the MD&A and audited consolidated financial statements
contained in our 2012 Annual Report.

For further information relating to our risk management practices and
risk factors affecting the Company, see "Risk Factors" in our most
recent Annual Information Form, "Risk Management and Risk Factors" and
"Critical Accounting and Actuarial Policies" in the MD&A in our 2012
Annual Report, and the "Risk Management" note to the consolidated
financial statements in our most recent annual and interim reports.

In this MD&A, the terms "Company", "Manulife Financial" and "we" mean
Manulife Financial Corporation ("MFC") and its subsidiaries.

Contents

A

OVERVIEW

D

RISK MANAGEMENT AND RISK FACTORS UPDATE

1.

Third quarter highlights

1.

Regulatory, actuarial and accounting risks

2.

Other items of note

2.

Variable annuity and segregated fund guarantees

3.

Caution related to sensitivities

B

FINANCIAL HIGHLIGHTS

4.

Publicly traded equity performance risk

1.

Third quarter earnings analysis

5.

Interest rate and spread risk

2.

Premiums and deposits

3.

Funds under management

E

ACCOUNTING MATTERS AND CONTROLS

4.

Capital

1.

Critical accounting and actuarial policies

5.

U.S. GAAP results

2.

Actuarial methods and assumptions

3.

Sensitivity of policy liabilities to updates to assumptions

C

PERFORMANCE BY DIVISION

4.

Accounting and reporting changes

1.

Asia

2.

Canadian

F

OTHER

3.

U.S.

1.

Performance and Non-GAAP measures

4.

Corporate and Other

2.

Key planning assumptions and uncertainties

3.

Caution regarding forward-looking statements

A OVERVIEW

A1 Third quarter highlights
Net income attributed to shareholders was $1,034 million in the third quarter of 2013 compared with a loss of
$211 million in the third quarter of 2012.

Third quarter 2013 earnings included core earnings of $704 million, $491
million favourable investment-related experience (in addition to the
$52 million included in core earnings) and market-related factors of
$94 million, partly offset by a charge of $252 million related to the
annual review of actuarial methods and assumptions.

The third quarter of 2012 results included $570 million of core earnings
and $365 million of favourable investment-related experience, in excess
of the amount reported in core earnings. These items were more than
offset by a charge of $1.0 billion related to the annual review of
actuarial methods and assumptions and a $200 million charge for
goodwill impairment.

Net income attributed to shareholders for the nine months ended
September 30, 2013 was $1,833 million as compared to $733 million for
the first nine months of 2012.

Core earnings increased $134 million compared to the third quarter 2012. The
increase reflects improved new business margins on our insurance
businesses, higher fee income as a result of the growth of our wealth
management businesses, improved policyholder claims experience, a
higher release of tax provisions from the closure of prior years' tax
filings and lower hedging costs.

Total investment-related experience was $543 million, of which $52 million was included in core earnings. The experience
included $284 million primarily attributable to favourable returns from
our timber, agriculture and private equity assets; gains from the
redeployment of government securities into higher yielding assets; and
continued excellent credit experience. In addition, we reported net
gains of $259 million related to planned asset allocation activities
that enhanced surplus liquidity and resulted in better asset-liability
matching in the respective liability segments.

Market-related factors of $94 million consisted of a $306 million gain related to the direct impact of equity
markets and variable annuity guarantees that are dynamically hedged, partially offset by charges of $212 million related to the direct impact of interest rates.

The annual review of actuarial methods and assumptions was completed in the third quarter, resulting in a total net charge of
$252 million. The net charge included:

a $530 million charge related to lapse and policyholder behavior
assumption changes. This included updates to John Hancock Insurance
premium persistency assumptions for universal life and variable
universal life products as well as lapse and policyholder behavior
assumptions across insurance and variable annuity businesses, primarily
in Canada and in Japan.

a $12 million charge due to the John Hancock Long-Term Care ("JH LTC")
triennial review. The net amount includes charges related to updated
mortality and morbidity assumptions, offset by the updated assumptions
related to the previously filed in-force rate increases as a result of
the 2010 review, refinements to the future tax reserve methodology and
more favourable lapse assumptions. As a result of the mortality and
morbidity experience review, additional in-force rate increases will be
filed for and the estimated benefit of these are included in the net
charge.

This was partly offset by:

a $203 million increase in earnings from the annual update to the market
based parameters used in the stochastic valuation of our segregated
fund business, mostly related to the impacts of foreign exchange and
bond fund parameter updates. The bond fund parameters review includes
updates to interest rates and volatility assumptions. The impact of
interest rate movements between the last review effective March 31,
2012 and March 31, 2013 led to a charge, which was more than offset by
the impact of the increase in interest rates in the second quarter of
2013. Effective in the third quarter 2013, bond fund parameters are
updated quarterly, and the impact is reported in the direct impact of
equity markets and interest rates.

an $87 million net increase in earnings from other changes to actuarial
methods and assumptions which includes the favourable impact of
refinements related to the projection of asset and liability cash
flows, partially offset by updates to mortality and morbidity
assumptions on business other than JH LTC.

The Minimum Continuing Capital and Surplus Requirements ("MCCSR") ratio for The Manufacturers Life Insurance Company ("MLI") closed the
quarter at 229 per cent compared with 222 per cent at the end of the
second quarter of 2013. This seven point increase was driven in part
by lower required capital on segregated funds, as a result of both
higher equity markets and changes to the assumptions used in the
required capital calculation consistent with the third quarter changes
in actuarial assumptions. Third quarter earnings also contributed to
the increase.

Insurance sales17 of $605 million in the third quarter of 2013 increased four per cent18 compared with the third quarter of 2012. Insurance sales in Asia
declined four per cent due to lower corporate product sales in Japan
partially offset by increased sales in Hong Kong and Other Asia. In
Canada, although Individual Insurance annualized premium sales were
eight per cent lower than the prior year, sales in Group Benefits drove
an increase of 27 per cent in total insurance sales of 27 per cent
compared with third quarter 2012. In the U.S., insurance sales were in
line with the prior year but reflected a more favourable product mix.

Wealth sales were $11.3 billion in third quarter 2013, an increase of 34 per cent
compared with the third quarter of 2012. Asia wealth sales increased by 21 per cent with strong double-digit
growth across most territories. In Canada, strong growth in mutual
fund deposits and bank lending volumes contributed to a 32 per cent
increase in wealth sales. U.S. Division's wealth sales rose 37 per
cent as mutual fund sales nearly doubled, but were partially offset by
a 43 per cent decline in Retirement Plan Services sales driven in part
by lower plan turnover in the market.

_______________

17

This item is a non-GAAP measure. See "Performance and Non-GAAP
Measures" below.

18

Growth (declines) in sales, premiums and deposits and funds under
management are stated on a constant currency basis. Constant currency
basis is a non-GAAP measure. See "Performance and Non-GAAP Measures"
below.

A2 Other items of note

We noted in our second quarter report that we expected that the impact
of a number of positive one-time items in the second half of the year,
when offset with the third quarter review of actuarial assumptions,
would result in an amount that would not be substantial in either
direction.

In the third quarter, the $259 million investment experience related to
the asset allocation activities that enhanced surplus liquidity and
resulted in better asset-liability matching in the liability segments
and the $252 million charge related to the review of actuarial
assumptions, net to a positive $7 million.

In the fourth quarter, we will be completing our review of our modeling
of future tax cash flows for our U.S. Variable Annuity business and we
expect that this could result in a charge to earnings. The amount is
dependent upon the potential implementation of changes to the
investment objectives of separate accounts that support our Variable
Annuity products, which require policyholder approval. Separately, as
previously announced, we expect the sale of our Taiwan insurance
business to close in the fourth quarter or early 2014, subject to
regulatory approvals. We expect the net impact of all these items, if
completed, would be neutral to positive19.

_______________

19

See "Caution regarding forward-looking statements" below.

B FINANCIAL HIGHLIGHTS

Quarterly Results

YTD Results

C$ millions, unless otherwise stated
unaudited

3Q 2013

2Q 2013

(restated)(1)
3Q 2012

2013

(restated)(1)
2012

Net income (loss) attributed to shareholders

$

1,034

$

259

$

(211)

$

1,833

$

733

Preferred share dividends

(33)

(32)

(31)

(97)

(83)

Common shareholders' net income (loss)

$

1,001

$

227

$

(242)

$

1,736

$

650

Reconciliation of core earnings to net income (loss)
attributed to shareholders:

Core earnings(2)

$

704

$

609

$

570

$

1,932

$

1,695

Investment-related experience in excess of
amounts included in core earnings

491

(97)

365

491

628

Core earnings plus investment-related experience in
excess of amounts included in core earnings

$

1,195

$

512

$

935

$

2,423

$

2,323

Other items to reconcile core earnings to net income
attributed to shareholders:

The 2012 results were restated to reflect the retrospective application
of new IFRS accounting standards effective January 1, 2013. For a
detailed description of the change see our first quarter 2013 report to
shareholders.

(2)

This item is a non-GAAP measure. See "Performance and Non-GAAP Measures"
below.

(3)

For a more detailed description see Section B1 below.

B1 Third quarter earnings analysis

The table below reconciles the third quarter 2013 core earnings of $704
million to the reported net income attributed to shareholders of $1,034
million.

C$ millions, unaudited

3Q 2013

2Q 2013

(restated)(1)
3Q 2012

Core earnings (losses)(2)

Asia Division

$

242

$

226

$

230

Canadian Division

268

225

229

U.S. Division

361

343

288

Corporate and Other (excluding expected cost of macro hedges and core
investment gains)

(135)

(105)

(103)

Expected cost of macro hedges(3)

(84)

(128)

(124)

Investment-related experience in core earnings(4)

52

48

50

Core earnings

$

704

$

609

$

570

Investment-related experience in excess of amounts included in core
earnings(4)

491

(97)

365

Core earnings plus investment-related experience in excess of
amounts included in core earnings

The 2012 results were restated to reflect the retrospective application
of new IFRS accounting standards effective January 1, 2013. For a
detailed description of the change see our first quarter 2013 report to
shareholders.

(2)

Core earnings is a non-GAAP measure. See "Performance and Non-GAAP
Measures" below.

(3)

The third quarter 2013 net loss from macro equity hedges was $329
million and consisted of a $84 million charge related to the estimated
expected cost of the macro equity hedges relative to our long-term
valuation assumptions and a charge of $245 million because actual
markets outperformed our valuation assumptions (included in direct
impact of equity markets and interest rates below).

(4)

As outlined under Critical Accounting and Actuarial Policies, net
insurance contract liabilities under IFRS for Canadian insurers are
determined using the Canadian Asset Liability Method ("CALM"). Under
CALM, the measurement of policy liabilities includes estimates
regarding future expected investment income on assets supporting the
policies. Experience gains and losses are reported when current period
activity differs from what was assumed in the policy liabilities at the
beginning of the period. These gains and losses can relate to both the
investment returns earned in the period, as well as to the change in
our policy liabilities driven by the impact of current period investing
activities on future expected investment income assumptions.

(5)

The direct impact of equity markets and interest rates is relative to
our policy liability valuation assumptions and includes changes to
interest rate assumptions, including a quarterly URR update for North
America, starting in Q1 2013, and for Japan, starting in Q3 2013, as
well as experience gains and losses on derivatives associated with our
macro equity hedges. We also include gains and losses on the sale of
available-for-sale ("AFS") bonds and derivative positions in the
surplus segment. See table below for components of this item.

(6)

Primarily reflects the impact on our deferred tax asset position of
Canadian provincial tax rate changes.

(7)

The restructuring charge is related to additional severance, pension and
consulting costs for the Company's Organizational Design project, which
was completed in Q2 2013.

The gain (charge) related to the direct impact of equity markets and
interest rates and variable annuity guarantee liabilities that are
dynamically hedged in the table above is attributable to:

C$ millions, unaudited

3Q 2013

2Q 2013

3Q 2012

Variable annuity guarantee liabilities that are dynamically hedged(1)

$

160

$

30

$

122

Variable annuity guarantee liabilities that are not dynamically hedged

Direct impact of equity markets and variable annuity guarantees that are
dynamically hedged(4)

$

306

$

(196)

$

389

Fixed income reinvestment rates assumed in the valuation of policy
liabilities(5)

(77)

151

(330)

Sale of AFS bonds and derivative positions in the Corporate and Other
segment

(72)

(127)

(25)

Charges due to lower fixed income URR assumptions used in the valuation
of
policy liabilities(6)

(63)

(70)

-

Direct impact of equity markets and interest rates and variable annuity
guarantees that are dynamically hedged

$

94

$

(242)

$

34

Direct impact of equity markets and interest rates

$

(66)

$

(272)

$

(88)

(1)

Our variable annuity guarantee dynamic hedging strategy is not designed
to completely offset the sensitivity of policy liabilities to all risks
associated with the guarantees embedded in these products. The gain in
the third quarter of 2013 was mostly because our equity fund results
outperformed indices and there was a gain on the release of provision
for adverse deviation associated with more favourable equity markets.
See the Risk Management section of the MD&A in our 2012 Annual Report.

(2)

The impact on general fund equity investments supporting policy
liabilities and on fee income includes the capitalized impact on fees
for variable universal life policies.

(3)

As described in the previous chart, we incurred a charge of $245 million
because actual markets outperformed our valuation assumptions.

(4)

In the third quarter of 2013, gross equity exposure gains of $1,018
million were partially offset by gross equity hedging charges of $245
million from macro hedge experience and charges of $467 million from
dynamic hedging experience which resulted in a gain of $306 million.

(5)

The charge in the third quarter of 2013 for fixed income reinvestment
assumptions was driven by the increase in Canadian swap spreads and the
decrease in U.S. corporate spreads.

(6)

Beginning with the first quarter of 2013, the URR impact is calculated
on a quarterly basis, whereas in 2012 it was calculated on an annual
basis in the second quarter.

B2 Premiums and deposits20

Premiums and deposits for insurance products were $6.1 billion in the
third quarter of 2013, an increase of nine per cent, on a constant
currency basis, compared with the third quarter of 2012. Premiums and
deposits for wealth products were $14.6 billion in the third quarter of
2013, an increase of $3.5 billion or 27 per cent on a constant currency
basis, compared with the third quarter of 2012.

B3 Funds under management20

Funds under management as at September 30, 2013 were a record $575
billion, an increase of $61 billion, or 10 per cent, on a constant
currency basis, compared with September 30, 2012. The increase was
largely attributed to $37 billion of favourable investment returns and
$22 billion of net positive policyholder cashflows.

B4 Capital20

MFC's total capital as at September 30, 2013 was $31.1 billion, an increase of $0.3 billion
from June 30, 2013 and $3.1 billion from September 30, 2012. The
increase from September 30, 2012 was primarily driven by net earnings
of $2.9 billion, net capital issued of $0.6 billion and the $0.3
billion impact from favourable currency movements on translation of
foreign operations, partially offset by cash dividends of $0.8 billion
over the period. As noted in Section A1 above, MLI's MCCSR ratio
closed the quarter at 229 per cent compared with 222 per cent at the
end of the second quarter of 2013.

_______________

20

This item is a non-GAAP measure. See "Performance and Non-GAAP Measures"
below.

B5 U.S. GAAP results

Net income attributed to shareholders in accordance with U.S. GAAP for
the third quarter of 2013 was $148 million, compared with net income
attributed to shareholders of $1,034 million under IFRS. The net
income in accordance with U.S. GAAP included $498 million in charges
with respect to our variable annuity business and macro hedges. Under
U.S. GAAP not all of the variable annuity business is accounted for on
a mark-to-market basis and therefore, when markets are favourable, the
losses on dynamic and macro hedges exceed the reduction in variable
annuity policy liabilities and other equity exposures.

As we are no longer reconciling our financial results under IFRS and
U.S. GAAP within our consolidated financial statements, net income
attributed to shareholders in accordance with U.S. GAAP is considered a
non-GAAP financial measure. The reconciliation of the major differences
between net income attributed to shareholders in accordance with IFRS
and the net income attributed to shareholders in accordance with U.S.
GAAP for the third quarter of 2013 follows, with major differences
expanded upon below:

C$ millions, unaudited

For the quarters ended September 30,

2013

(restated)(1)
2012

Net income (loss) attributed to shareholders in accordance
with IFRS

$

1,034

$

(211)

Key earnings differences:

Variable annuity guarantee liabilities

$

(635)

$

(323)

Impact of mark-to-market accounting and investing activities on
investment income and policy liabilities

(394)

258

New business differences including acquisition costs

(210)

(151)

Changes in actuarial methods and assumptions, excluding URR

175

431

Goodwill impairment charge

-

200

Other differences

178

277

Total earnings differences

$

(886)

$

692

Net income attributed to shareholders in accordance with
U.S. GAAP

$

148

$

481

(1)

The 2012 IFRS results were restated to reflect the retrospective
application of new IFRS accounting standards effective January 1, 2013.
For a detailed description of the change see our first quarter 2013
report to shareholders.

Accounting for variable annuity guarantee liabilities

IFRS follows a predominantly "mark-to-market" accounting approach to
measure variable annuity guarantee liabilities while U.S. GAAP only
uses "mark-to-market" accounting for certain benefit guarantees. The
U.S. GAAP accounting results in an accounting mismatch between the
hedge assets supporting the dynamically hedged guarantees and the
guarantees not accounted for on a mark-to-market basis. Another
difference is that U.S. GAAP reflects the Company's own credit standing
in the measurement of the liability. In the third quarter of 2013, we
reported a net charge of $169 million (2012 - gain of $97 million) in
our total variable annuity businesses under U.S. GAAP compared with a
gain of $466 million under IFRS (2012 - gain of $420 million). Under
both accounting bases we reported charges on our macro hedging program
of $329 million.

Investment income and policy liabilities

Under IFRS, accumulated unrealized gains and losses arising from fixed
income investments and interest rate derivatives supporting policy
liabilities are largely offset in the valuation of the policy
liabilities. The third quarter 2013 IFRS impacts of fixed income
reinvestment assumptions, general fund equity investments, fixed income
and alternative long-duration asset investing totaled a net gain of
$416 million (2012 - gain of $115 million) compared with U.S. GAAP net
realized gains and other investment-related gains of $22 million (2012
- gain of $373 million).

Differences in the treatment of acquisition costs and other new business
items

Acquisition costs that are related to and vary with the production of
new business are explicitly deferred and amortized under U.S. GAAP but
are recognized as an implicit reduction in insurance liabilities along
with other new business gains and losses under IFRS.

Changes in actuarial methods and assumptions

The charge recognized under IFRS from changes in actuarial methods and
assumptions of $252 million in the third quarter of 2013 (2012 - charge
of $1,006) compared to a charge of $77 million (2012 - charge of $575
million) on a U.S. GAAP basis.

Total equity in accordance with U.S. GAAP21 as at September 30, 2013 was approximately $10 billion higher than
under IFRS. Of this difference, approximately $7 billion was
attributable to the higher cumulative net income on a U.S. GAAP basis.
The remaining difference was primarily attributable to the treatment of
unrealized gains on fixed income investments and derivatives in a cash
flow hedging relationship which are reported in equity under U.S. GAAP,
but where the fixed income investments and interest rate derivatives
are supporting policy liabilities, these accumulated unrealized gains
are largely offset in the valuation of the policy liabilities under
IFRS. The majority of the difference in equity between the two
accounting bases as at September 30, 2013 arose from our U.S.
businesses.

A reconciliation of the major differences in total equity is as follows:

The 2012 IFRS amounts were restated to reflect the retrospective
application of new IFRS accounting standards effective January 1, 2013.
For a detailed description of the change see our first quarter 2013
report to shareholders.

(2)

Reflects the net difference in the currency translation account after
the reset to zero through retained earnings upon adoption of IFRS at
January 1, 2010.

_______________

21

This term is a non-GAAP measure. See "Performance and Non-GAAP
Measures" below.

C PERFORMANCE BY DIVISION

C1 Asia Division

($ millions unless otherwise stated)

Quarterly results

YTD results

Canadian dollars

3Q 2013

2Q 2013

3Q 2012

3Q 2013

3Q 2012

Net income attributed to shareholders(1)

$

480

$

386

$

491

$

1,794

$

1,287

Core earnings(1)

242

226

230

694

783

Premiums and deposits

3,218

5,138

2,944

12,824

9,058

Funds under management (billions)

80.1

79.3

76.2

80.1

76.2

U.S. dollars

Net income attributed to shareholders

$

463

$

378

$

492

$

1,761

$

1,290

Core earnings

233

220

231

677

781

Premiums and deposits

3,099

5,024

2,958

12,553

9,036

Funds under management (billions)

77.9

75.4

77.5

77.9

77.5

(1)

See "Performance and Non-GAAP Measures" for a reconciliation between
IFRS net income attributed to shareholders and core earnings.

Asia Division's net income attributed to shareholders was US$463 million for the third quarter of 2013 compared with US$492
million for the third quarter of 2012. The decrease was primarily
related to the impact of equity markets and interest rates on variable
annuity guarantee liabilities. Core earnings of US$233 million for the
third quarter of 2013 increased US$2 million compared to the third
quarter of 2012. Growth in in-force earnings and improved new business
margins were mostly offset by US$26 million related to currency
movements in comparison to the U.S. dollar.

Year-to-date net income attributed to shareholders was US$1,761 million
compared with US$1,290 million for the same period of 2012.

Premiums and deposits for the third quarter of 2013 were US$3.1 billion, an increase of 13
per cent on a constant currency basis compared with the third quarter
of 2012. Premiums and deposits for insurance products of US$1.5
billion increased five per cent driven by in-force business growth,
partly offset by lower increasing-term product sales in Japan. Wealth
management premiums and deposits of US$1.6 billion increased 21 per
cent driven by higher Mandatory Provident Fund sales in Hong Kong,
higher mutual fund sales in Japan and higher single premium unit-linked
product sales in Asia Other territories.

Funds under management as at September 30, 2013 were US$77.9 billion, an increase of 11 per
cent on a constant currency basis compared with September 30, 2012.
Growth was driven by positive net policyholder cash flows of US$6.5
billion and favourable investment returns, partly offset by the
negative impact of a weaker Japanese Yen.

C2 Canadian Division

($ millions unless otherwise stated)

Quarterly results

YTD results

Canadian dollars

3Q 2013

2Q 2013

3Q 2012

3Q 2013

3Q 2012

Net income attributed to shareholders(1)

$

414

$

103

$

378

$

455

$

918

Core earnings(1)

268

225

229

672

602

Premiums and deposits

4,901

5,661

4,160

15,897

13,451

Funds under management (billions)

138.8

135.8

131.1

138.8

131.1

(1)

See "Performance and Non-GAAP Measures" for a reconciliation between
IFRS net income attributed to shareholders and core earnings.

Canadian Division's net income attributed to shareholders was $414 million for the third quarter of 2013 compared with $378
million for the third quarter of 2012. Core earnings of $268 million
for the third quarter of 2013 increased by $39 million or 17 per cent
compared with the third quarter of 2012. The increase reflects higher
new business margins as a result of price increases, business mix and
rise in interest rates; growth of in-force business; lower expenses and
higher release of tax provisions resulting from the closure of prior
years' tax filings. Favourable market and investment-related
experience excluded from core earnings was $149 million in the third
quarter of 2013 (2012 - favourable market and investment-related
experience of $149 million).

Year-to-date net income attributed to shareholders was $455 million
compared with $918 million for the same period of 2012.

Premiums and deposits in the third quarter of 2013 were $4.9 billion, an increase of $0.7
billion or 18 per cent compared to third quarter 2012 levels. The
increase was driven by strong growth in Manulife Mutual Funds and Group
Retirement Solutions.

Funds under management of $138.8 billion grew by $7.7 billion or six per cent from September
30, 2012 driven by growth in the wealth management businesses.

C3 U.S. Division

($ millions unless otherwise stated)

Quarterly results

YTD results

Canadian dollars

3Q 2013

2Q 2013

(restated)(1)
3Q 2012

3Q 2013

(restated)(1)
3Q 2012

Net income attributed to shareholders(2)

$

928

$

429

$

438

$

2,083

$

1,193

Core earnings(2)

361

343

288

1,144

792

Premiums and deposits

11,473

11,713

8,510

34,911

26,283

Funds under management (billions)

319.9

315.7

287.2

319.9

287.2

U.S. dollars

Net income attributed to shareholders

$

894

$

419

$

441

$

2,033

$

1,193

Core earnings

348

336

289

1,120

791

Premiums and deposits

11,046

11,450

8,552

34,125

26,224

Funds under management (billions)

311.0

300.3

292.0

311.0

$

292.0

(1)

The 2012 results were restated to reflect the retrospective application
of new IFRS accounting standards effective January 1, 2013. For a
detailed description of the change see our first quarter 2013 report to
shareholders.

(2)

See "Performance and Non-GAAP Measures" for a reconciliation between
IFRS net income attributed to shareholders and core earnings.

U.S. Division's net income attributed to shareholders was US$894 million for the third quarter of 2013 compared with US$441
million for the third quarter of 2012. Core earnings for the third
quarter of 2013 were US$348 million, an increase of US$59 million
compared with the third quarter of 2012.

Contributing to the increase in core earnings were higher insurance new
business margins as a result of product actions, price increases and
business mix; lower amortization of Variable Annuity deferred
acquisition costs; improved policyholder experience in our Life
business; and higher fee income from higher average assets under
management. This was partially offset by costs associated with the
hedging of additional in-force variable annuity guaranteed value.
Items reconciling core earnings to net income attributed to
shareholders in the third quarter of 2013 included favourable market
and investment-related experience of US$546 million.

Year-to-date net income attributed to shareholders was US$2,033 million
compared with US$1,193 million for the same period of 2012.

Premiums and deposits for the third quarter of 2013 were US$11.0 billion, an increase of 29
per cent from the third quarter of 2012. The increase was primarily
driven by higher mutual fund sales.

Funds under management as at September 30, 2013 were a record US$311.0 billion, up seven per
cent from September 30, 2012. The increase was due to positive
investment returns and strong net wealth sales in Wealth Asset
Management partially offset by surrender and benefit payments in John
Hancock Annuities.

C4 Corporate and Other

($ millions, unless otherwise stated)

Quarterly Results

YTD results

Canadian dollars

3Q 2013

2Q 2013

(restated)(1)
3Q 2012

3Q 2013

(restated)(1)
3Q 2012

Net loss attributed to shareholders(2)

$

(788)

$

(659)

$

(1,518)

$

(2,499)

$

(2,665)

Core losses (excluding macro hedges and
core investment gains)(2)

$

(135)

$

(105)

$

(103)

$

(368)

$

(283)

Expected cost of macro hedges

(84)

(128)

(124)

(360)

(349)

Investment gains included in core earnings

52

48

50

150

150

Total core losses

$

(167)

$

(185)

$

(177)

$

(578)

$

(482)

Premiums and deposits

$

1,110

$

1,167

$

1,132

$

3,082

$

2,581

Funds under management (billions)

35.8

36.2

19.3

35.8

19.3

(1)

The 2012 results were restated to reflect the retrospective application
of new IFRS accounting standards effective January 1, 2013. For a
detailed description of the change see our first quarter 2013 report to
shareholders.

(2)

See "Performance and Non-GAAP Measures" for a reconciliation between
IFRS net income attributed to shareholders and core earnings.

For segment reporting purposes, the impact of updates to actuarial
assumptions, settlement costs for macro equity hedges and other
non-operating items are included in this segment's earnings.

Corporate and Other reported a net loss attributed to shareholders of $788 million for the third quarter of 2013 compared to a net loss of
$1,518 million for the third quarter of 2012.

Charges in the third quarter of 2013 included: a $252 million charge for
changes in actuarial methods and assumptions; $245 million of net
experience losses on macro hedges; $72 million of realized losses on
AFS bonds and related interest rate swaps; and core losses of $167
million.

Core losses were $167 million in the third quarter of 2013 compared with
$177 million in the third quarter of 2012. The reduction in the
expected cost of macro hedges was mostly offset by lower P&C volumes,
the non-recurrence of an adjustment in 2012 to interest on tax
provisions and lower asset volumes.

Premiums and deposits for the third quarter of 2013 were $1,110 million, consistent with
$1,132 million for the third quarter of 2012.

Funds under management of $35.8 billion as at September 30, 2013 (September 30, 2012 - $19.3
billion) included assets managed by Manulife Asset Management on behalf
of institutional clients of $30.7 billion (2012 - $23.7 billion) and
$7.0 billion (2012 - $3.9 billion) of the Company's own funds,
partially offset by a $1.9 billion (2012 - $8.3 billion) total company
adjustment related to the reclassification of derivative positions from
invested assets to other assets and other liabilities. The increase in
the Company's own funds primarily reflects net income earned over the
period, the impact of the stronger U.S. dollar and the issuance of
preferred shares, partially offset by the net redemptions of debt.

D RISK MANAGEMENT AND RISK FACTORS UPDATE

This section provides an update to our risk management practices and
risk factors outlined in the MD&A in our 2012 Annual Report.

D1 Regulatory, actuarial and accounting risks

As previously disclosed, changes to U.S. statutory accounting practices
concerning actuarial reserving standards for certain universal life
products pursuant to Actuarial Guideline 38 ("AG38") were effective as
of December 31, 2012 and covered AG38 business issued since January 1,
2005. The New York Department of Insurance recently announced their
decision to end the use of the AG38 revisions and revert to their prior
reserving rules and interpretations. Any anticipated additional
reserves arising from this announcement are expected to be manageable
within our current plans.

As we disclosed previously, the Canadian Actuarial Standards Board
("ASB") is reviewing the Standards of Practice related to economic
reinvestment assumptions used in the valuation of policy liabilities.
Based on recent discussions, we expect the Exposure Draft to be issued
in late 2013 with changes to the standards to be effective in the
fourth quarter of 2014. We will not know the potential impact of the
changes until after the release of the exposure draft.

The International Accounting Standards Board ("IASB") and the Financial
Accounting Standards Board ("FASB") issued exposure drafts of new
accounting standards for insurance contracts in June 2013. The two
proposals are similar in some of their main principles, but differ in
many of the requirements around measurement of ongoing obligations to
policyholders. Our primary concern relates to the material unwarranted
volatility that would be introduced under both the exposure drafts. If
implemented in the form set forth in the exposure draft, we believe
these proposals are likely to have a material impact on our financial
results and our regulatory capital position.

The comment periods on the exposure drafts ended on October 25, 2013 and
the final standards are not expected to be effective until at least
2018. We, along with other companies in the industry from around the
world, provided feedback on the significant issues we see with the IASB
and FASB exposure draft proposals. In addition, Manulife, MetLife
Inc., New York Life and Prudential Financial Inc. performed field
testing of both the IASB and FASB proposals within the exposure draft
response period.

D2 Variable annuity and segregated fund guarantees

As outlined in the MD&A in our 2012 Annual Report, guarantees on
variable products and segregated funds may include one or more of
death, maturity, income and withdrawal guarantees. Variable annuity
and segregated fund guarantees are contingent and only payable upon the
occurrence of the relevant event, if fund values at that time are below
guaranteed values. Depending on future equity market levels,
liabilities on current in-force business would be due primarily in the
period from 2015 to 2038.

We seek to mitigate a portion of the risks embedded in our retained
(i.e. net of reinsurance) variable annuity and segregated fund
guarantee business through the combination of our dynamic and macro
hedging strategies (see Section D4).

Contracts with guaranteed long-term care benefits are included in this
category.

(2)

Where a policy includes both living and death benefits, the guarantee in
excess of the living benefit is included in the death benefit category.

(3)

Death benefits include stand-alone guarantees and guarantees in excess
of living benefit guarantees where both death and living benefits are
provided on a policy.

(4)

Amount at risk (in-the-money amount) is the excess of guarantee values
over fund values on all policies where the guarantee value exceeds the
fund value. This amount is not currently payable. For guaranteed
minimum death benefit, the amount at risk is defined as the current
guaranteed minimum death benefit in excess of the current account
balance. For guaranteed minimum income benefit, the amount at risk is
defined as the excess of the current annuitization income base over the
current account value. For all guarantees, the amount at risk is
floored at zero at the single contract level.

(5)

The amount at risk net of reinsurance at September 30, 2013 was $6,533
million (December 31, 2012 - $10,266 million) of which: US$3,923
million (December 31, 2012 - US$5,452 million) was on our U.S.
business, $1,471 million (December 31, 2012 - $2,354 million) was on
our Canadian business, US$658 million (December 31, 2012 - US$2,094
million) was on our Japan business and US$340 million (December 31,
2012 - US$407 million) was related to Asia (other than Japan) and our
run-off reinsurance business.

As outlined above, the amount at risk on variable annuity contracts, net
of reinsurance was $6.5 billion at September 30, 2013 compared with
$10.3 billion at December 31, 2012 and $8.5 billion at June 30, 2013.
The decrease compared to both these periods was driven by the increase
in equity markets.

The policy liabilities established for variable annuity and segregated
fund guarantees were $2,786 million at September 30, 2013 (December 31,
2012 - $7,948 million). For non-dynamically hedged business, policy
liabilities declined from $2,695 million at December 31, 2012 to $574
million at September 30, 2013. For the dynamically hedged business,
the policy liabilities declined from $5,253 million at December 31,
2012 to $2,212 million at September 30, 2013. The decrease in policy
liabilities is mainly due to the significant increase in equity markets
in 2013, and in the case of dynamically hedged business, is also due to
the increase in swap rates in 2013.

D3 Caution related to sensitivities

In this document, we provide sensitivities and risk exposure measures
for certain risks. These include sensitivities due to specific changes
in market prices and interest rate levels projected using internal
models as at a specific date, and are measured relative to a starting
level reflecting the Company's assets and liabilities at that date and
the actuarial factors, investment activity and investment returns
assumed in the determination of policy liabilities. The risk exposures
measure the impact of changing one factor at a time and assume that all
other factors remain unchanged. Actual results can differ significantly
from these estimates for a variety of reasons including the interaction
among these factors when more than one changes; changes in actuarial
and investment return and future investment activity assumptions;
actual experience differing from the assumptions, changes in business
mix, effective tax rates and other market factors; and the general
limitations of our internal models. For these reasons, the
sensitivities should only be viewed as directional estimates of the
underlying sensitivities for the respective factors based on the
assumptions outlined below. Given the nature of these calculations, we
cannot provide assurance that the actual impact on net income
attributed to shareholders or on MLI's MCCSR ratio will be as
indicated.

D4 Publicly traded equity performance risk

Our stated goal is to have approximately 75 per cent of the underlying
earnings sensitivity to equity markets offset by hedges. As at
September 30, 2013, we estimate that approximately 66 to 78 per cent of
our underlying earnings sensitivity to a 10 per cent decline in equity
markets would be offset by dynamic and macro hedges, compared with 72
to 83 per cent at December 31, 2012 and 72 per cent to 81 per cent at
June 30, 2013. The upper end of the range assumes the performance of
the dynamic hedging program would completely offset the loss from the
dynamically hedged variable annuity guarantee liabilities and that the
macro hedge assets are re-balanced in line with market changes. The
lower end of the range assumes that there is not a complete offset due
to our practices of not hedging the provisions for adverse deviation
and rebalancing equity hedges in the dynamic program at five per cent
intervals and that the macro hedge assets are rebalanced in line with
market changes.

As outlined in our 2012 Annual Report, our macro hedging strategy is
designed to mitigate public equity risk arising from variable annuity
guarantees not dynamically hedged and from other products and fees. In
addition, our variable annuity guarantee dynamic hedging strategy is
not designed to completely offset the sensitivity of policy liabilities
to all risks associated with the guarantees embedded in these products
(see pages 44 and 45 of our 2012 Annual Report).

The tables below show the potential impact on net income attributed to
shareholders resulting from an immediate 10, 20 and 30 per cent change
in market values of publicly traded equities followed by a return to
the expected level of growth assumed in the valuation of policy
liabilities. The potential impact is shown after taking into account
the impact of the change in markets on the hedge assets. While we
cannot reliably estimate the amount of the change in dynamically hedged
variable annuity guarantee liabilities that will not be offset by the
profit or loss on the dynamic hedge assets, we make certain assumptions
for the purposes of estimating the impact on shareholders' net income.
The potential impact is shown assuming:

(a)

First that the change in value of the hedge assets completely offsets
the change in the dynamically hedged variable annuity guarantee
liabilities including the provisions for adverse deviation; and

(b)

Then that the change in value of the dynamically hedged variable annuity
guarantee liabilities is not completely offset, including the
assumption that the provision for adverse deviation is not offset and
that the hedge assets are based on the actual position at the period
end. In addition, we assume that we increase our macro equity hedges in
negative market shock scenarios and reduce macro equity hedges in
positive market shock scenarios.

It is also important to note that these estimates are illustrative, and
that the hedging program may underperform these estimates, particularly
during periods of high realized volatility and/or periods where both
interest rates and equity market movements are unfavourable.

Potential impact on net income attributed to shareholders arising from
changes to public equity returns(1)

As at September 30, 2013

(C$ millions)

-30%

-20%

-10%

10%

20%

30%

Underlying sensitivity to net income attributed to shareholders(2)

Variable annuity guarantees

$

(4,470)

$

(2,660)

$

(1,130)

$

770

$

1,240

$

1,540

Asset based fees

(300)

(200)

(100)

100

200

300

General fund equity investments(3)

(500)

(330)

(160)

150

310

480

Total underlying sensitivity

$

(5,270)

$

(3,190)

$

(1,390)

$

1,020

$

1,750

$

2,320

Impact of hedge assets

Impact of macro hedge assets(4)

$

910

$

610

$

300

$

(300)

$

(420)

$

(500)

Impact of dynamic hedge assets assuming the change in the value of the
hedge assets completely offsets the change in the dynamically hedged
variable annuity guarantee liabilities(4)

3,190

1,870

790

(540)

(920)

(1,190)

Total impact of hedge assets assuming the change in value of the dynamic
hedge assets completely offsets the change in the dynamically hedged
variable annuity guarantee liabilities(4)

$

4,100

$

2,480

$

1,090

$

(840)

$

(1,340)

$

(1,690)

Net impact assuming the change in the value of the hedged assets
completely offsets the change in the dynamically hedged variable
annuity guarantee liabilities(5)

$

(1,170)

$

(710)

$

(300)

$

180

$

410

$

630

Net impact of assuming that the provisions for adverse deviation for
dynamically hedged liabilities are not offset and that the hedging
program rebalances at 5% market intervals(6)

(690)

(450)

(170)

(10)

(30)

(40)

Net impact assuming the change in value of the dynamic hedge assets does
not completely offset the change in the dynamically hedged variable
annuity guarantee liabilities, as described above(6)

$

(1,860)

$

(1,160)

$

(470)

$

170

$

380

$

590

Percentage of underlying earnings sensitivity to movements in equity
markets that is offset by hedges if dynamic hedge assets completely
offset the change in the dynamically hedged variable annuity guarantee
liability

78%

78%

78%

82%

77%

73%

Percentage of underlying earnings sensitivity to movements in equity
markets that is offset by hedge assets if dynamic hedge assets do not
completely offset the change in the dynamically hedged variable annuity
guarantee liability(6)

65%

64%

66%

83%

78%

75%

(1)

See "Caution related to sensitivities" above.

(2)

Defined as earnings sensitivity to a change in public equity markets
including settlements on reinsurance contracts, but before the offset
of hedge assets or other risk mitigants.

(3)

This impact for general fund equities is calculated as at a
point-in-time and does not include: (i) any potential impact on public
equity weightings; (ii) any gains or losses on public equities held in
the Corporate and Other segment; or (iii) any gains or losses on public
equity investments held in Manulife Bank. The participating policy
funds are largely self-supporting and generate no material impact on
net income attributed to shareholders as a result of changes in equity
markets.

(4)

Includes the impact of rebalancing equity hedges in the macro hedging
program.

(5)

Variable Annuity Guarantee Liability includes the best estimate
liabilities and associated provisions for adverse deviation.

(6)

Represents the impact of re-balancing equity hedges for dynamically
hedged variable annuity guarantee liabilities at five per cent market
intervals. Also represents the impact of changes in markets on
provisions for adverse deviation that are not hedged, but does not
include any impact in respect of other sources of hedge ineffectiveness
e.g. fund tracking, realized volatility and equity, interest rate
correlations different from expected among other factors.

Potential impact on net income attributed to shareholders arising from
changes to public equity returns(1)

As at December 31, 2012

(C$ millions)

-30%

-20%

-10%

10%

20%

30%

Underlying sensitivity to net income attributed to shareholders(2)

restated(4)

restated(4)

Variable annuity guarantees

$

(5,640)

$

(3,510)

$

(1,580)

$

1,260

$

2,220

$

2,930

Asset based fees

(270)

(180)

(90)

90

180

270

General fund equity investments(3)

(380)

(260)

(130)

120

230

350

Total underlying sensitivity

$

(6,290)

$

(3,950)

$

(1,800)

$

1,470

$

2,630

$

3,550

Impact of hedge assets

Impact of macro hedged assets(4)

$

2,010

$

1,340

$

670

$

(670)

$

(1,160)

$

(1,580)

Impact of dynamic hedge assets assuming the change in the value of the
hedge assets completely offsets the change in the dynamically hedged
variable annuity guarantee liabilities(4)

3,070

1,890

820

(600)

(1,010)

(1,300)

Total impact of hedge assets assuming the change in value of the dynamic
hedge assets completely offsets the change in the dynamically hedged
variable annuity guarantee liabilities(4)

$

5,080

$

3,230

$

1,490

$

(1,270)

$

(2,170)

$

(2,880)

Net impact assuming the change in the value of the hedged assets
completely offsets the change in the dynamically hedged variable
annuity guarantee liabilities(5)

$

(1,210)

$

(720)

$

(310)

$

200

$

460

$

670

Impact of assuming that the provisions for adverse deviation for
dynamically hedged liabilities are not offset and that the hedging
program rebalances at 5% market intervals(6)

(710)

(470)

(190)

(10)

(40)

(70)

Net impact assuming the change in value of the dynamic hedge assets does
not completely offset the change in the dynamically hedged variable
annuity guarantee liabilities, as described above(6)

$

(1,920)

$

(1,190)

$

(500)

$

190

$

420

$

600

Percentage of underlying earnings sensitivitiy to movements in equity
markets that is offset by hedges if dynamic hedge assets completely
offset the change in the dynamically hedged variable annuity guarantee
liability

81%

82%

83%

86%

83%

81%

Percentage of underlying earnings sensitivity to movements in equity
markets that is offset by hedge assets if dynamic hedge assets do not
completely offset the change in the dynamically hedged variable annuity
guarantee liability(6)

69%

70%

72%

87%

84%

83%

(1)

See "Caution related to sensitivities" above.

(2)

Defined as earnings sensitivity to a change in public equity markets
including settlements on reinsurance contracts, but before the offset
of hedge assets or other risk mitigants.

(3)

This impact for general fund equities is calculated as at a
point-in-time and does not include: (i) any potential impact on public
equity weightings; (ii) any gains or losses on public equities held in
the Corporate and Other segment; or (iii) any gains or losses on public
equity investments held in Manulife Bank. The participating policy
funds are largely self-supporting and generate no material impact on
net income attributed to shareholders as a result of changes in equity
markets.

(4)

The numbers above were restated to reflect the fact that in the first
quarter of 2013, we refined our assumptions with respect to the amount
of macro hedge offsets in the above calculation. We now assume that we
reduce equity hedges in our macro hedging program under positive market
shock scenarios.

(5)

Variable Annuity Guarantee Liability includes the best estimate
liabilities and associated provisions for adverse deviation.

(6)

Represents the impact of re-balancing equity hedges for dynamically
hedged variable annuity guarantee liabilities at five per cent market
intervals. Also represents the impact of changes in markets on
provisions for adverse deviation that are not hedged, but does not
include any impact in respect of other sources of hedge ineffectiveness
e.g. fund tracking, realized volatility and equity, interest rate
correlations different from expected among other factors.

Potential impact on MLI's MCCSR ratio arising from public equity returns
different from the expected return for policy liability valuation(1),(2)

Impact on MLI MCCSR ratio

Percentage points

-30%

-20%

-10%

+10%

+20%

+30%

September 30, 2013

(17)

(11)

(4)

16

31

36

December 31, 2012

(17)

(11)

(5)

1

3

9

(1)

See "Caution related to sensitivities" above. In addition, estimates
exclude changes to the net actuarial gains/losses with respect to the
Company's pension obligations as a result of changes in equity markets,
as the impact on the quoted sensitivities is not considered to be
material.

(2)

The potential impact is shown assuming that the change in value of the
hedge assets does not completely offset the change in the dynamically
hedged variable annuity guarantee liabilities. The estimated amount
that would not be completely offset relates to our practices of not
hedging the provisions for adverse deviation and of rebalancing equity
hedges for dynamically hedged variable annuity liabilities at five per
cent intervals.

The change in the capital ratio sensitivities on positive equity shocks
is due to the required capital on segregated fund guarantees reaching
the level at which any additional gains can be immediately reflected
and no longer need to be brought in on a smoothed basis.

During the quarter, the derivative notional value in our dynamic hedging
program increased by $300 million as the increase for dynamically
hedging additional in-force business was partially offset by the normal
rebalancing activities responding to favourable markets. On a
year-to-date basis, the dynamic hedging equity notional value decreased
by $1.6 billion.

The equity futures notional required for the macro hedging program
decreased by $3.2 billion during the quarter. This was due to
rebalancing trades that were transacted across various indices as a
result of market performance, the addition of further cohorts of
liabilities to the dynamic hedging program and adjustments for the
review of actuarial methods and assumptions impact on the liability
sensitivities. On a year-to-date basis, the macro hedging program
equity notional value decreased by $4.4 billion.

D5 Interest rate and spread risk

As at September 30, 2013, the sensitivity of our quarterly net income
attributed to shareholders to a 100 basis point parallel decline in
interest rates was a charge of $600 million. The $200 million increase
in sensitivity from December 31, 2012 was primarily attributable to
updates to our valuation assumptions as a result of our annual review
of actuarial methods and assumptions.

The 100 basis point parallel decline includes a change of one per cent
in current government, swap and corporate rates for all maturities
across all markets with no change in credit spreads between government,
swap and corporate rates, and with a floor of zero on government rates
and corporate spreads, relative to the rates assumed in the valuation
of policy liabilities, including embedded derivatives. As the
sensitivity to a 100 basis point decline in interest rates includes the
impact of a change in prescribed reinvestment scenarios where
applicable, the impact of changes to interest rates for less than, or
more than, the amounts indicated are unlikely to be linear. For
variable annuity guarantee liabilities that are dynamically hedged, it
is assumed that interest rate hedges are rebalanced at 20 basis point
intervals.

The income impact does not allow for any future potential changes to the
URR assumptions or other potential impacts of lower interest rate
levels, for example, increased strain on the sale of new business or
lower interest earned on our surplus assets. It also does not reflect
potential management actions to realize gains or losses on AFS fixed
income assets held in the surplus segment in order to partially offset
changes in MLI's MCCSR ratio due to changes in interest rate levels.

Potential impact on net income attributed to shareholders and MLI's
MCCSR ratio of an immediate one per cent parallel change in interest
rates relative to rates assumed in the valuation of policy liabilities(1),(2),(3),(4)

As at

September 30, 2013

December 31, 2012

- 100bp

+100bp

- 100bp

+100bp

Net income attributed to shareholders (C$ millions)

Excluding change in market value of AFS fixed income assets held in the
surplus segment

$

(600)

$

300

$

(400)

$

200

From fair value changes in AFS assets held in surplus, if realized

700

(600)

800

(700)

MLI's MCCSR ratio (Percentage points)

Before impact of change in market value of AFS fixed income assets held
in the surplus segment(5)

(14)

24

(16)

10

From fair value changes in AFS assets held in surplus, if realized

5

(5)

5

(5)

(1)

See "Caution related to sensitivities" above. In addition, estimates
exclude changes to the net actuarial gains/losses with respect to the
Company's pension obligations as a result of changes in interest rates,
as the impact on the quoted sensitivities is not considered to be
material.

(2)

Includes guaranteed insurance and annuity products, including variable
annuity contracts as well as adjustable benefit products where benefits
are generally adjusted as interest rates and investment returns change,
a portion of which have minimum credited rate guarantees. For
adjustable benefit products subject to minimum rate guarantees, the
sensitivities are based on the assumption that credited rates will be
floored at the minimum.

(3)

The amount of gain or loss that can be realized on AFS fixed income
assets held in the surplus segment will depend on the aggregate amount
of unrealized gain or loss. The table above only reflects the impact of
the change in the unrealized position, as the total unrealized position
will depend upon the unrealized position at the beginning of the
period.

(4)

Sensitivities are based on projected asset and liability cash flows at
the beginning of the quarter adjusted for the estimated impact of new
business, investment markets and asset trading during the quarter. Any
true-up to these estimates, as a result of the final asset and
liability cash flows to be used in the next quarter's projection, are
reflected in the next quarter's sensitivities. Impact of realizing 100%
of market value of AFS fixed income is as of the end of the quarter.

(5)

The impact on MLI's MCCSR ratio includes both the impact of the change
in earnings on available capital as well as the change in required
capital that results from a change in interest rates. The potential
increase in required capital accounted for 9 of the 14 point impact of
a 100 bp decline in interest rates on MLI's MCCSR ratio.

The following table shows the potential impact on net income attributed
to shareholders resulting from a change in credit spreads and swap
spreads over government bond rates for all maturities across all
markets with a floor of zero on the total interest rate, relative to
the spreads assumed in the valuation of policy liabilities.

Potential impact on net income attributed to shareholders arising from
changes to corporate spreads and swap spreads(1),(2),(3)

C$ millions
As at

September 30,
2013

December 31,
2012

Corporate spreads(4)

Increase 50 basis points

$

400

$

500

Decrease 50 basis points

(500)

(1,000)

Swap spreads

Increase 20 basis points

$

(600)

$

(600)

Decrease 20 basis points

500

600

(1)

See "Caution related to sensitivities" above.

(2)

The impact on net income attributed to shareholders assumes no gains or
losses are realized on our AFS fixed income assets held in the surplus
segment and excludes the impact arising from changes in off-balance
sheet bond fund value arising from changes in credit spreads. The
participating policy funds are largely self-supporting and generate no
material impact on net income attributed to shareholders as a result of
changes in corporate and swap spreads.

(3)

Sensitivities are based on projected asset and liability cash flows at
the beginning of the quarter adjusted for the estimated impact of new
business, investment markets and asset trading during the quarter. Any
true-up to these estimates, as a result of the final asset and
liability cash flows to be used in the next quarter's projection, are
reflected in the next quarter's sensitivities.

(4)

Corporate spreads are assumed to grade to an expected long-term average
over five years.

As the sensitivity to a 50 basis point decline in corporate spreads
includes the impact of a change in prescribed reinvestment scenarios
where applicable, the impact of changes to corporate spreads for less
than, or more than, the amounts indicated are unlikely to be linear.
The potential earnings impact of a 50 basis point decline in corporate
spreads related to the impact of the scenario change was nil at
September 30, 2013 and $400 million at December 31, 2012. This change
was the primary driver in the decrease in sensitivity since December
31, 2012.

E ACCOUNTING MATTERS AND CONTROLS

E1 Critical accounting and actuarial policies

Our significant accounting policies under IFRS are described in note 1
to our Consolidated Financial Statements for the year ended December
31, 2012. The critical accounting policies and the estimation
processes related to the determination of insurance contract
liabilities, fair values of financial instruments, the application of
derivative and hedge accounting, the determination of pension and other
post-employment benefit obligations and expenses, and accounting for
income taxes and uncertain tax positions are described on pages 63 to
71 of our 2012 Annual Report.

E2 Actuarial methods and assumptions

Impact of third quarter 2013 updates to assumptions

The comprehensive review of valuation methods and assumptions is
performed annually and is designed to minimize our exposure to
uncertainty by managing both asset-related and liability-related
risks. This is accomplished by monitoring experience and selecting
assumptions which represent a best estimate view of future experience
and margins that are appropriate for the risks assumed. While the
assumptions selected represent the Company's current best estimates and
assessment of risk, the ongoing monitoring of experience and the
economic environment is likely to result in future changes to the
valuation assumptions, which could be material.

The quantification of the impact of the 2013 review of the actuarial
methods and assumptions underlying policy liabilities is as of July 1,
2013 for all lines of business.

The 2013 review of actuarial methods and assumptions that was carried
out in the third quarter resulted in an increase in policy liabilities
of $560 million. Net of the impacts on participating surplus and
non-controlling interests, shareholders' income decreased by $252
million post-tax.

The following table summarizes the impact of the third quarter changes
in actuarial methods and assumptions on policy liabilities and net
income attributed to shareholders.

C$ millions

To

To Net Income

Assumption

Policy Liabilities

Attributed to Shareholders

Lapses and Policyholder Behaviour

U.S. insurance premium persistency update

$

320

$

(208)

Insurance lapse updates

483

(242)

Variable annuity lapse updates

101

(80)

U.S. Long Term Care Triennial Review

18

(12)

Segregated Fund Parameter Update

(220)

203

Other Annual Updates

(142)

87

Net impact

$

560

$

(252)

Lapses and Policyholder Behaviour

Premium persistency assumptions were adjusted in the U.S. for universal
life and variable universal life products to reflect recent experience
which led to a $208 million charge to earnings.

Lapse rates across several insurance business units were updated to
reflect recent policyholder lapse experience. This included a review of
the lapse experience for the Canadian individual insurance whole life
and term products and certain whole life insurance products in Japan.
Net of the impact on participating surplus this resulted in a $242
million charge to earnings.

Lapse rate assumptions were updated for a number of Variable Annuity
contracts to reflect updated experience results, including reducing
base lapse rates in Japan as contracts get closer to maturity. This
resulted in a charge of $80 million to earnings.

U.S. Long Term Care Triennial Review

U.S. Insurance completed a comprehensive long-term care experience
study. This included a review of mortality and morbidity experience,
lapse experience, and of the reserve for in-force rate increases filed
for as a result of the 2010 review. The net impact of the review was a
$12 million charge to earnings. This included several offsetting items
as outlined below.

Expected claims costs increased primarily due to lower mortality, higher
incidence rates, and claims periods longer than expected in policy
liabilities. This increase in expected cost was offset by a number of
items, including (i) the expected future premium increases resulting
from this year's review, (ii) reflecting actual experience on
previously filed for rate increases as the actual approval rate is
higher than what was reflected in our policy liabilities, (iii) method
and modeling refinements largely related to the modeling of future tax
cash flows, and (iv) updated lapse assumptions.

The expected future premium increases assumed in the policy liabilities
resulted in a benefit to earnings of $1.0 billion; this includes a
total of $0.5 billion of future premium increases that are due to our
revised morbidity, mortality, and lapse assumptions, while the
remainder is a carryover from outstanding amounts from our 2010
filings. Premium increases averaging approximately 25 per cent will be
sought on about one-half of the in-force business, excluding the
carryover of 2010 amounts requested. We have factored into our
assumptions the estimated timing and amount of state approved premium
increases. Our actual experience obtaining price increases could be
materially different than we have assumed, resulting in further policy
liability increases or releases which could be material.

Segregated Fund Parameters Update

Certain parameters used in the stochastic valuation of our segregated
fund valuation were updated and resulted in a $203 million benefit to
earnings. The primary updates were to our foreign exchange and bond
fund parameters, both of which were favourable. The bond fund
parameter review included updates to interest rate and volatility
assumptions. The impact of interest rate movements between the last
review effective March 31, 2012 and March 31, 2013 led to a charge,
which was more than offset by the impact of the increase in interest
rates in the second quarter of 2013.

Other Annual Updates

We made a number of model refinements related to the projection of both
asset and liability cashflows which led to a $137 million benefit to
earnings. This includes several offsetting items: a benefit due to a
refinement in the modeling of guaranteed minimum withdrawal benefit
products in U.S. Annuities; a benefit due to further clarity on the
treatment of Canadian investment income tax, partially offset by a
charge due to a refinement in the modeling of reinsurance contracts for
Canadian individual insurance; and a charge due to aligning the
modeling of swaps across all segments.

Mortality and Morbidity charges of $77 million were the result of the
review of assumptions for multiple product lines.

The net impact of all other updates was a $27 million benefit to
earnings, which included updates to investment returns and future
expense assumptions.

We will be completing our review of our modeling of future tax cash
flows for our U.S. Variable Annuity business in the fourth quarter
which we expect to result in a strengthening of policy liabilities22.

_______________________________

22

See "Caution regarding forward-looking statements" below.

E3 Sensitivity of policy liabilities to updates to assumptions

When the assumptions underlying our determination of policy liabilities
are updated to reflect recent and emerging experience or change in
outlook, the result is a change in the value of policy liabilities
which in turn affects income. The sensitivity of after-tax income to
updates to asset related assumptions underlying policy liabilities is
shown below, assuming that there is a simultaneous update to the
assumption across all business units.

For updates to asset related assumptions, the sensitivity is shown net
of the corresponding impact on income of the change in the value of the
assets supporting policy liabilities. In practice, experience for each
assumption will frequently vary by geographic market and business and
assumption updates are made on a business/geographic specific basis.
Actual results can differ materially from these estimates for a variety
of reasons including the interaction among these factors when more than
one changes; changes in actuarial and investment return and future
investment activity assumptions; actual experience differing from the
assumptions; changes in business mix, effective tax rates and other
market factors; and the general limitations of our internal models.

Most participating business is excluded from this analysis because of
the ability to pass both favourable and adverse experience to the
policyholders through the participating dividend adjustment.

Potential impact on accumulated next five years and the following five
years net income attributed to shareholders arising from potential
changes to the fixed income ultimate reinvestment rates ("URR") (1)

Risk free rates rise 50 bp immediately from their September 30, 2013 or
December 31, 2012, levels respectively, and then remain at those new
levels thereafter.

$

(200)

$

200

$

(900)

$

-

Risk free rates fall 50 bp immediately from their September 30, 2013 or
December 31, 2012, levels, respectively, and then remain at those new
levels thereafter.

$

(1,000)

$

(200)

$

(2,200)

$

(500)

(1)

Current URRs in Canada are 0.7% per annum and 2.7% per annum for short
and long-term bonds, respectively, and in the U.S. are 0.7% per annum
and 3.5% per annum for short and long-term bonds, respectively. Since
the URRs are based upon a five and ten year rolling average of
government bond rates, continuation of current rates or a further
decline could have a material impact on net income.

Under Canadian IFRS, we must test a number of prescribed interest rate
scenarios. The scenario that produces the largest policy liabilities is
used and is called the booking scenario. The resulting interest
scenario for most of our business is a gradual grading of market
interest rates from current market levels to assumed ultimate
reinvestment rates over 20 years.

The sensitivity of net income attributed to shareholders to further
updates to the ultimate reinvestment rates at September 30, 2013 has
decreased from December 31, 2012 due to the increase in interest rates
during that time.

The sensitivity to public equity returns above includes the impact on
both segregated fund guarantee reserves and on other policy
liabilities. For a 100 basis point increase in expected growth rates,
the impact from segregated fund guarantee reserves is $300 million
(December 31, 2012 - $500 million). For a 100 basis point decrease in
expected growth rates, the impact from segregated fund guarantee
reserves is $(300) million (December 31, 2013 - $(600) million).
Expected long-term annual market growth assumptions for public equities
pre-dividends for key markets are based on long-term historical
observed experience and compliance with actuarial standards. The growth
rates for returns in the major markets used in the stochastic valuation
models for valuing segregated fund guarantees are 7.6% per annum in
Canada, 7.6% per annum in the U.S. and 5.2% per annum in Japan. Growth
assumptions for European equity funds are market-specific and vary
between 5.8% and 7.85%.

(2)

For future annual returns on public equity, the decrease of $300 million
in sensitivity from December 31, 2012 to September 30, 2013 is
primarily related to the shift of some of our variable annuity
guaranteed value from our macro-hedging program to our dynamic hedging
program. Specifically, prospective changes in macro hedge costs as a
result of changes in public equity returns are not reflected in
non-dynamically hedged liabilities, whereas changes in dynamic hedge
costs as a result of changes in public equity returns are reflected in
dynamically hedged liabilities.

(3)

Alternative long-duration assets include commercial real estate, timber
and agricultural real estate, oil and gas, and private equities. The
decrease of $400 million in sensitivity from December 31, 2012 to
September 30, 2013 is primarily related to the impact of risk free
rates in some jurisdictions during the period, increasing the rate at
which funds can be reinvested.

(4)

Volatility assumptions for public equities are based on long-term
historic observed experience and compliance with actuarial standards.
The resulting volatility assumptions are 17.15% per annum in Canada and
17.15% per annum in the U.S. for large cap public equities, and 19% per
annum in Japan. For European equity funds, the volatility assumptions
vary between 16.15% and 18.4%.

E4 Accounting and reporting changes

(a) Impact of standards applied retrospectively in 2013

Effective January 1, 2013, the Company adopted several new and amended
accounting pronouncements. The amendments to IAS 19 "Employee Benefits"
and IFRS 10 "Consolidated Financial Statements" were adopted
retrospectively. As a result of these adoptions, net income attributed
to shareholders for the three and nine months ended September 30, 2012
increased by $16 million and $54 million, respectively.

(b) Future accounting and reporting changes beginning in 2014 or later

There are a number of accounting and reporting changes issued by the
IASB that will impact the Company beginning in 2014 or later. These
changes are outlined in our second quarter 2013 report to shareholders.

F OTHER

F1 Performance and Non-GAAP Measures

We use a number of non-GAAP financial measures to measure overall
performance and to assess each of our businesses. A financial measure
is considered a non-GAAP measure for Canadian securities law purposes
if it is presented other than in accordance with generally accepted
accounting principles used for the Company's audited financial
statements. Non-GAAP measures include: Core Earnings; Net Income
Attributed to Shareholders in Accordance with U.S. GAAP; Total Equity
in Accordance with U.S. GAAP; Core ROE; Diluted Core Earnings Per
Common Share; Constant Currency Basis; Premiums and Deposits; Funds
under Management; Capital; New Business Embedded Value; Sales and Total
Annualized Insurance and Wealth Premium Equivalent Basis Sales.
Non-GAAP financial measures are not defined terms under GAAP and,
therefore, with the exception of Net Income Attributed to Shareholders
in Accordance with U.S. GAAP and Total Equity in Accordance with U.S.
GAAP (which are comparable to the equivalent measures of issuers whose
financial statements are prepared in accordance with U.S. GAAP), are
unlikely to be comparable to similar terms used by other issuers.
Therefore, they should not be considered in isolation or as a
substitute for any other financial information prepared in accordance
with GAAP.

Core earnings (losses) is a non-GAAP measure which we use to better understand the long-term
earnings capacity and valuation of the business. Core earnings excludes
the direct impact of changes in equity markets and interest rates as
well as a number of other items, outlined below, that are considered
material and exceptional in nature. While this metric is relevant to
how we manage our business and offers a consistent methodology, it is
not insulated from macro-economic factors, which can have a significant
impact.

Any future changes to the core earnings definition referred to below,
will be disclosed.

Items that are included in core earnings are:

Expected earnings on in-force, including expected release of provisions
for adverse deviation, fee income, margins on group business and spread
business such as Manulife Bank and asset fund management.

Macro hedging costs based on expected market returns.

New business strain.

Policyholder experience gains or losses.

Acquisition and operating expenses compared to expense assumptions used
in the measurement of policy liabilities.

Up to $200 million of favourable investment-related experience reported
in a single year which is referred to as "core investment gains".

Earnings on surplus other than mark-to-market items. Gains on
available-for-sale ("AFS") equities and seed money investments are
included in core earnings.

Routine or non-material legal settlements.

All other items not specifically excluded.

Tax on the above items.

All tax related items except the impact of enacted or substantially
enacted income tax rate changes.

Gains (charges) on macro equity hedges relative to expected costs. The
expected cost of macro hedges is calculated using the equity
assumptions used in the valuation of policy liabilities.

Gains (charges) on higher (lower) fixed income reinvestment rates
assumed in the valuation of policy liabilities, including the impact on
the fixed income ultimate reinvestment rate ("URR").

Gains (charges) on sale of AFS bonds and open derivatives not in hedging
relationships in the Corporate and Other segment.

The earnings impact of the difference between the net increase
(decrease) in variable annuity liabilities that are dynamically hedged
and the performance of the related hedge assets. Our variable annuity
dynamic hedging strategy is not designed to completely offset the
sensitivity of policy liabilities to all risks or measurements
associated with the guarantees embedded in these products for a number
of reasons, including: provisions for adverse deviation, fund
performance, the portion of the interest rate risk that is not
dynamically hedged, realized equity and interest rate volatilities and
changes to policyholder behaviour.

Net favourable investment-related experience in excess of $200 million
per annum or net unfavourable investment-related experience on a
year-to-date basis. Investment-related experience relates to fixed
income trading, alternative long-duration asset returns, credit
experience and asset mix changes. This favourable and unfavourable
investment-related experience is a combination of reported investment
experience as well as the impact of investing activities on the
measurement of our policy liabilities. The maximum of $200 million per
annum to be reported in core earnings compares with an average of over
$80 million per quarter of favourable investment-related experience
reported since first quarter 2007.

Mark-to-market gains or losses on assets held in the Corporate and Other
segment other than gains on AFS equities and seed money investments in
new segregated or mutual funds.

Changes in actuarial methods and assumptions, excluding URR.

The impact on the measurement of policy liabilities of changes in
product features or new reinsurance transactions, if material.

Goodwill impairment charges.

Gains or losses on disposition of a business.

Material one-time only adjustments, including highly
unusual/extraordinary and material legal settlements or other items
that are material and exceptional in nature.

Tax on the above items.

Impact of enacted or substantially enacted income tax rate changes.

The following table summarizes for the past eight quarters core earnings
and net income (loss) attributed to shareholders.

Total Company

Quarterly Results

C$ millions, unaudited

2013

2012 (restated)(1)

2011

3Q

2Q

1Q

4Q

3Q

2Q

1Q

4Q

Core earnings (losses)

Asia Division

$

242

$

226

$

226

$

180

$

230

$

286

$

267

$

213

Canadian Division

268

225

179

233

229

201

172

142

U.S. Division

361

343

440

293

288

247

257

189

Corporate and Other (excluding expected cost of macro hedges and core
investment gains)

(135)

(105)

(128)

(62)

(103)

(67)

(113)

(124)

Expected cost of macro hedges

(84)

(128)

(148)

(140)

(124)

(118)

(107)

(97)

Investment-related experience included in core earnings

52

48

50

50

50

50

50

50

Total core earnings

$

704

$

609

$

619

$

554

$

570

$

599

$

526

$

373

Investment-related experience in excess of amounts included in core
earnings

491

(97)

97

321

365

54

209

261

Core earnings plus investment-related experience in excess of amounts
included in core earnings

$

1,195

$

512

$

716

$

875

$

935

$

653

$

735

$

634

Other items to reconcile core earnings to net income (loss) attributed
to shareholders

Gains (charges) on variable annuity liabilities that are not dynamically
hedged

$

306

$

75

$

757

$

556

$

298

$

(758)

$

982

$

234

Gains (charges) on general fund equity investments supporting policy
liabilities and on fee income

85

(70)

115

48

55

(116)

121

56

Gains (charges) on macro equity hedges relative to expected costs

(245)

(231)

(730)

(292)

(86)

423

(556)

(250)

Gains (charges) on higher (lower) fixed income reinvestment rates
assumed in the valuation of policy liabilities

(77)

151

(245)

(290)

(330)

305

(425)

122

Gains (charges) on sale of AFS bonds and derivative positions in the
Corporate segment

(72)

(127)

(8)

(40)

(25)

96

(47)

(9)

Charges due to lower fixed income URR assumptions used in the valuation
of policy liabilities

(63)

(70)

(97)

-

-

(677)

-

-

Direct impact of equity markets and interest rates

$

(66)

$

(272)

$

(208)

$

(18)

$

(88)

$

(727)

$

75

$

153

(1)

The 2012 results were restated to reflect the retrospective application
of new IFRS accounting standards effective January 1, 2013. For a
detailed description of the change see our first quarter 2013 report to
shareholders

Asia Division

Quarterly Results

C$ millions, unaudited

2013

2012

2011

2Q

2Q

1Q

4Q

3Q

2Q

1Q

4Q

Asia Division core earnings

$

242

$

226

$

226

$

180

$

230

$

286

$

267

$

213

Investment-related experience in excess of amounts included in core
earnings

(4)

(18)

43

33

12

28

(18)

47

Core earnings plus investment-related experience in excess of
amounts included in core earnings

$

238

$

208

$

269

$

213

$

242

$

314

$

249

$

260

Other items to reconcile core earnings to net income (loss) attributed
to
shareholders

The 2012 results were restated to reflect the retrospective application
of new IFRS accounting standards effective January 1, 2013. For a
detailed description of the change see our first quarter 2013 report to
shareholders.

Investment-related experience in excess of amounts included in core
earnings

(44)

(56)

(22)

(48)

(15)

(15)

(44)

(16)

Core losses plus investment-related experience in excess of amounts
included in core earnings

$

(211)

$

(241)

$

(248)

$

(200)

$

(192)

$

(150)

$

(214)

$

(187)

Other items to reconcile core earnings to net income (loss) attributed
to
shareholders

Direct impact of equity markets and interest rates

(325)

(407)

(735)

(332)

(120)

(168)

(595)

(255)

Changes in actuarial methods and assumptions, excluding URR

(252)

(35)

(69)

(87)

(1,006)

-

12

2

Goodwill impairment charge

-

-

-

-

(200)

-

-

(665)

Gain (loss) on sale of Life Retrocession Business

-

-

-

-

-

(50)

-

-

Tax items and restructuring charge related to organizational design

-

24

-

37

-

-

18

-

Net loss attributed to shareholders

$

(788)

$

(659)

$

(1,052)

$

(582)

$

(1,518)

$

(368)

$

(779)

$

(1,105)

(1)

The 2012 results were restated to reflect the retrospective application
of new IFRS accounting standards effective January 1, 2013. For a
detailed description of the change see our first quarter 2013 report to
shareholders.

Net income (loss) attributed to shareholders in accordance with U.S.
GAAP is a non-GAAP profitability measure. It shows what the net income would
have been if the Company had applied U.S. GAAP as its primary financial
reporting basis. We consider this to be a relevant profitability
measure given our large U.S. domiciled investor base and for
comparability to our U.S. peers who report under U.S. GAAP.

Total equity in accordance with U.S. GAAP is a non-GAAP measure. It shows what the total equity would have been if
the Company had applied U.S. GAAP as its primary financial reporting
basis. We consider this to be a relevant measure given our large U.S.
domiciled investor base and for comparability to our U.S. peers who
report under U.S. GAAP.

Core return on common shareholders' equity ("Core ROE") is a non-GAAP profitability measure that presents core
earnings available to common shareholders as a percentage of the
capital deployed to earn the core earnings. The Company calculates
Core ROE using average common shareholders' equity.

Diluted core earnings per common share is core earnings available to common shareholders expressed per diluted
weighted average common share outstanding.

The Company also uses financial performance measures that are prepared
on a constant currency basis, which exclude the impact of currency fluctuations and which are
non-GAAP measures. Quarterly amounts stated on a constant currency
basis in this report are calculated, as appropriate, using the income
statement and balance sheet exchange rates effective for the third
quarter of 2013.

Premiums and deposits is a non-GAAP measure of top line growth. The Company calculates
premiums and deposits as the aggregate of (i) general fund premiums,
net of reinsurance, reported as premiums on the Consolidated Statement
of Income, (ii) segregated fund deposits, excluding seed money,
("deposits from policyholders"), (iii) adding back the premiums ceded
related to FDA coinsurance, (iv) investment contract deposits, (v)
mutual fund deposits, (vi) deposits into institutional advisory
accounts, (vii) premium equivalents for "administration services only"
group benefit contracts ("ASO premium equivalents"), (viii) premiums in
the Canadian Group Benefits reinsurance ceded agreement, and (ix) other
deposits in other managed funds.

Premiums and deposits

Quarterly results

C$ millions

3Q 2013

2Q 2013

3Q 2012

Net premium income

$

4,429

$

4,359

$

2,187

Deposits from policyholders

5,261

5,333

5,539

Premiums and deposits per financial statements

$

9,690

$

9,692

$

7,726

Add back premiums ceded relating to FDA coinsurance

-

-

1,799

Investment contract deposits

9

16

40

Mutual fund deposits

8,111

10,545

4,335

Institutional advisory account deposits

1,089

1,146

1,106

ASO premium equivalents

723

756

673

Group benefits ceded premiums

981

1,427

967

Other fund deposits

99

97

100

Total premiums and deposits

$

20,702

$

23,679

$

16,746

Currency impact

-

206

350

Constant currency premiums and deposits

$

20,702

$

23,885

$

17,096

Funds under management is a non-GAAP measure of the size of the Company. It represents the
total of the invested asset base that the Company and its customers
invest in.

Funds under management

Quarterly results

(C$ millions)
As at

3Q 2013

2Q 2013

(restated)(1)
3Q 2012

Total invested assets

$

230,336

$

231,935

$

223,932

Segregated funds net assets

225,842

221,952

205,685

Funds under management per financial statements

$

456,178

$

453,887

$

429,617

Mutual funds

81,049

76,634

55,705

Institutional advisory accounts (excluding segregated funds)

28,686

28,416

21,597

Other funds

8,721

8,025

6,849

Total funds under management

$

574,634

$

566,962

$

513,768

Currency impact

-

(9,469)

10,465

Constant currency funds under management

$

574,634

$

557,493

$

524,233

(1)

The 2012 results were restated to reflect the retrospective application
of new IFRS accounting standards effective January 1, 2013. For a
detailed description of the change see our first quarter 2013 report to
shareholders.

Capital The definition we use for capital, a non-GAAP measure, serves as a
foundation of our capital management activities at the MFC level. For
regulatory reporting purposes, the numbers are further adjusted for
various additions or deductions to capital as mandated by the
guidelines used by OSFI. Capital is calculated as the sum of (i) total
equity excluding AOCI on cash flow hedges and (ii) liabilities for
preferred shares and capital instruments.

Capital

Quarterly results

(C$ millions)
As at

3Q 2013

2Q 2013

(restated)(1)
3Q 2012

Total equity

$

26,881

$

26,544

$

23,917

Add AOCI loss on cash flow hedges

115

131

200

Add liabilities for preferred shares and capital instruments

4,119

4,130

3,897

Total capital

$

31,115

$

30,805

$

28,014

(1)

The 2012 results were restated to reflect the retrospective application
of new IFRS accounting standards effective January 1, 2013. For a
detailed description of the change see our first quarter 2013 report to
shareholders.

New business embedded value ("NBEV") is the change in shareholders' economic value as a result of
sales in the reporting period. NBEV is calculated as the present value
of expected future earnings, after the cost of capital, on actual new
business sold in the period using future mortality, morbidity,
policyholder behaviour, expense and investment assumptions that are
consistent with the assumptions used in the valuation of our policy
liabilities.

The principal economic assumptions used in the NBEV calculations in the
third quarter were as follows:

Canada

U.S.

Hong Kong

Japan

MCCSR ratio

150%

150%

150%

150%

Discount rate

8.25%

8.50%

9.00%

6.25%

Jurisdictional income tax rate

26.5%

35%

16.5%

31%

Foreign exchange rate

n/a

1.038568

0.133912

0.010501

Yield on surplus assets

4.50%

4.50%

4.50%

2.00%

Sales are measured according to product type:

For total individual insurance, sales include 100 per cent of new
annualized premiums and 10 per cent of both excess and single premiums.
For individual insurance, new annualized premiums reflect the
annualized premium expected in the first year of a policy that requires
premium payments for more than one year. Sales are reported gross
before the impact of reinsurance. Single premium is the lump sum
premium from the sale of a single premium product, e.g. travel
insurance.

For group insurance, sales include new annualized premiums and
administrative services only premium equivalents on new cases, as well
as the addition of new coverages and amendments to contracts, excluding
rate increases.

For individual wealth management contracts, all new deposits are
reported as sales. This includes individual annuities, both fixed and
variable; mutual funds; college savings 529 plans; and authorized bank
loans and mortgages. As we have discontinued sales of new VA contracts
in the U.S., beginning in the first quarter of 2013, subsequent
deposits into existing U.S. VA contracts will not be considered sales.

For group pensions/retirement savings, sales of new regular premiums and
deposits reflect an estimate of expected deposits in the first year of
the plan with the Company. Single premium sales reflect the assets
transferred from the previous plan provider. Sales include the impact
of the addition of a new division or of a new product to an existing
client. Total sales include both new regular and single premiums and
deposits.

Total Annualized Insurance and Wealth Premium Equivalent ("APE") Basis
Sales are sales that comprise 100 per cent of regular premium/deposit sales
and 10 per cent of single premium/deposit sales for both insurance and
wealth management products.

F2 Key planning assumptions and uncertainties

Manulife's 2016 management objectives do not constitute guidance and are
based on certain key planning assumptions, including: current
accounting and regulatory capital standards; no acquisitions; equity
market and interest rate assumptions consistent with our long term
assumptions, and favourable investment-related experience included in
core earnings23.

_____________________________

23

Interest rate assumptions based on forward curve as of June 30, 2012.
Core earnings include up to $200 million per annum of favourable
investment-related experience.

F3 Caution regarding forward-looking statements

From time to time, MFC makes written and/or oral forward-looking
statements, including in this document. In addition, our
representatives may make forward-looking statements orally to analysts,
investors, the media and others. All such statements are made pursuant
to the "safe harbour" provisions of Canadian provincial securities laws
and the U.S. Private Securities Litigation Reform Act of 1995. The
forward-looking statements in this document include, but are not
limited to, statements with respect to our 2016 management objectives
for core earnings and core ROE, insurance sales momentum in Hong Kong
and Japan in the fourth quarter, and the net impact of the fourth
quarter charge related to our review of our modeling of future tax cash
flows for our U.S. Variable Annuity business and the sale of our Taiwan
life insurance business.

The forward-looking statements in this document also relate to, among
other things, our objectives, goals, strategies, intentions, plans,
beliefs, expectations and estimates, and can generally be identified by
the use of words such as "may", "will", "could", "should", "would",
"likely", "suspect", "outlook", "expect", "intend", "estimate",
"anticipate", "believe", "plan", "forecast", "objective", "seek",
"aim", "continue", "goal", "restore", "embark" and "endeavour" (or the
negative thereof) and words and expressions of similar import, and
include statements concerning possible or assumed future results.
Although we believe that the expectations reflected in such
forward-looking statements are reasonable, such statements involve
risks and uncertainties, and undue reliance should not be placed on
such statements and they should not be interpreted as confirming market
or analysts' expectations in any way.

Certain material factors or assumptions are applied in making
forward-looking statements, including in the case of our 2016
management objectives for core earnings and core ROE, the assumptions
described under "Key Planning Assumptions and Uncertainties" in our
2012 Annual Report and in this document, and actual results may differ
materially from those expressed or implied in such statements. As
outlined above, the amount of the fourth quarter charge related to
modeling of future tax cash flows for our U.S. Variable annuity
business is dependent upon the potential implementation of changes to
the investment objectives of separate accounts that support our
Variable Annuity products, which require policyholder approval. The
sale of our Taiwan business is subject to regulatory approval.
Important factors that could cause actual results to differ materially
from expectations include but are not limited to: the factors
identified in "Key Planning Assumptions and Uncertainties" in our 2012
Annual Report and in this document; general business and economic
conditions (including but not limited to the performance, volatility
and correlation of equity markets, interest rates, credit and swap
spreads, currency rates, investment losses and defaults, market
liquidity and creditworthiness of guarantors, reinsurers and
counterparties); changes in laws and regulations; changes in accounting
standards; our ability to execute strategic plans and changes to
strategic plans; downgrades in our financial strength or credit
ratings; our ability to maintain our reputation; impairments of
goodwill or intangible assets or the establishment of provisions
against future tax assets; the accuracy of estimates relating to
morbidity, mortality and policyholder behaviour; the accuracy of other
estimates used in applying accounting policies and actuarial methods;
our ability to implement effective hedging strategies and unforeseen
consequences arising from such strategies; our ability to source
appropriate assets to back our long dated liabilities; level of
competition and consolidation; our ability to market and distribute
products through current and future distribution channels; unforeseen
liabilities or asset impairments arising from acquisitions and
dispositions of businesses; the realization of losses arising from the
sale of investments classified as available-for-sale; our liquidity,
including the availability of financing to satisfy existing financial
liabilities on expected maturity dates when required; obligations to
pledge additional collateral; the availability of letters of credit to
provide capital management flexibility; accuracy of information
received from counterparties and the ability of counterparties to meet
their obligations; the availability, affordability and adequacy of
reinsurance; legal and regulatory proceedings, including tax audits,
tax litigation or similar proceedings; our ability to adapt products
and services to the changing market; our ability to attract and retain
key executives, employees and agents; the appropriate use and
interpretation of complex models or deficiencies in models used;
political, legal, operational and other risks associated with our
non-North American operations; acquisitions and our ability to complete
acquisitions including the availability of equity and debt financing
for this purpose; the disruption of or changes to key elements of the
Company's or public infrastructure systems; environmental concerns; and
our ability to protect our intellectual property and exposure to claims
of infringement. Additional information about material risk factors
that could cause actual results to differ materially from expectations
and about material factors or assumptions applied in making
forward-looking statements may be found in the body of this document as
well as under "Risk Factors" in our most recent Annual Information
Form, under "Risk Management", "Risk Management and Risk Factors" and
"Critical Accounting and Actuarial Policies" in the Management's
Discussion and Analysis in our most recent annual report, under "Risk
Management and Risk Factors Update" and "Critical Accounting and
Actuarial Policies" in the Management's Discussion and Analysis in our
most recent interim report, in the "Risk Management" note to
consolidated financial statements in our most recent annual and interim
reports and elsewhere in our filings with Canadian and U.S. securities
regulators. The forward-looking statements in this document are, unless
otherwise indicated, stated as of the date hereof and are presented for
the purpose of assisting investors and others in understanding our
financial position and results of operations as well as our objectives
and strategic priorities, and may not be appropriate for other
purposes. We do not undertake to update any forward-looking
statements, except as required by law.

The 2012 results have been restated to reflect the retrospective
application of new IFRS accounting standards effective January 1, 2013.
For a detailed description of the change see our first quarter 2013
report to shareholders.

(2)

In 2012, the Company entered into a coinsurance agreement, effective
April 1, 2012, to reinsure 89 per cent of its book value fixed deferred
annuity business from John Hancock U.S.A. and a separate agreement,
effective July 1, 2012, to reinsure 90 per cent of its book value fixed
deferred annuity business from John Hancock Life Insurance Company of
New York. Under the terms of both of these agreements, the Company will
maintain the responsibility for servicing of the policies.

(3)

The realized and unrealized gains (losses) on assets supporting
insurance and investment contract liabilities are mostly offset by
changes in the measurement of our policy obligations. For fixed income
assets supporting insurance and investment contracts, equities
supporting pass through products and derivatives related to variable
annuity hedging programs, the impact of realized/unrealized gains
(losses) on the assets is largely offset in the change in insurance and
investment contract liabilities. The realized/unrealized gains (losses)
on assets supporting insurance and investment contract liabilities
related primarily to the impact of interest rate changes on bond and
fixed income derivative positions as well as interest rate swaps
supporting the dynamic hedge program.

Consolidated Statements of Financial Position

(Canadian $ in millions, unaudited)

(restated)1

As at

September 30

December 31

Assets

2013

2012

Invested assets

Cash and short-term securities

$

14,691

$

13,480

Securities

Bonds

115,218

119,281

Equities

13,098

11,995

Loans

Mortgages

36,547

35,082

Private placements

20,095

20,275

Policy loans

7,094

6,793

Bank loans

1,972

2,142

Real estate

8,811

8,513

Other invested assets

12,810

11,561

Total invested assets

$

230,336

$

229,122

Other assets

Accrued investment income

$

1,816

$

1,794

Outstanding premiums

699

1,009

Derivatives

9,783

14,707

Goodwill and intangible assets

5,199

5,113

Reinsurance assets

17,475

18,681

Deferred tax asset

3,833

3,445

Miscellaneous

3,234

3,127

Total other assets

$

42,039

$

47,876

Segregated funds net assets

$

225,842

$

207,985

Total assets

$

498,217

$

484,983

Liabilities and Equity

Policy liabilities

Insurance contract liabilities

$

193,262

$

199,588

Investment contract liabilities

2,437

2,420

Bank deposits

19,315

18,857

Deferred tax liability

630

603

Derivatives

7,869

7,500

Other liabilities

13,126

13,922

$

236,639

$

242,890

Long-term debt

4,736

5,046

Liabilities for preferred shares and capital instruments

4,119

3,903

Segregated funds net liabilities

225,842

207,985

Total liabilities

$

471,336

$

459,824

Equity

Issued share capital

Preferred shares

$

2,693

$

2,497

Common shares

20,138

19,886

Contributed surplus

269

257

Shareholders' retained earnings

4,272

3,256

Shareholders' accumulated other comprehensive income (loss)

(903)

(1,184)

Total shareholders' equity

$

26,469

$

24,712

Participating policyholders' equity

86

146

Non-controlling interests

326

301

Total equity

$

26,881

$

25,159

Total liabilities and equity

$

498,217

$

484,983

(1)

The December 31, 2012 amounts have been restated to reflect the
retrospective application of new IFRS accounting standards effective
January 1, 2013. For a detailed description of the change see our first
quarter 2013 report to shareholders.

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